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Amazon (AMZN) to Report Q1 Earnings: What's in the Offing?
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Amazon (AMZN - Free Report) is scheduled to report first-quarter 2020 results on Apr 30.
We note that the Zacks Consensus Estimate for first-quarter 2020 earnings currently stands at $6.35 per share, down 1.1% over the past 30 days. The figure suggests a decline of 10.4% from the year-ago quarter.
Further, Amazon expects first-quarter net sales between $69 billion and $73 billion. The figure is anticipated to improve in the range of 16-22% on a year-over-year basis. Management projects an unfavorable impact of approximately 5 basis points (bps) from foreign exchange rates.
Notably, the Zacks Consensus Estimate for net sales is pegged at $73.42 billion, which indicates an improvement of 22.9% from the prior-year quarter.
The company surpassed the Zacks Consensus Estimate in two of the trailing four quarters. It has a trailing four-quarter positive earnings surprise of 27.47%, on average.
During the first quarter, Amazon witnessed a flurry of orders driven by customers’ unwillingness to visit offline stores on fears of contracting the novel coronavirus. This is likely to have contributed to the company’s performance in the quarter to be reported.
However, overflowing orders have been slowing down the delivery speed of Amazon. Further, delivery issues and rapidly spreading COVID-19 infection resulted in a temporary pause on the delivery of non-essential and luxury items during the to-be-reported quarter. This is likely to get reflected in the company’s first-quarter results.
Nevertheless, the e-commerce giant left no stone unturned to cater to the rising customer demand and promoting worker welfare amid the coronavirus pandemic.
The company’s hiring spree in a bid to improve delivery timings, and keeping the delivery vans and stores sanitized has been noteworthy.
Further, Amazon’s Whole Foods stores in United States, Canada and the U.K. dedicated an entire hour to serve only senior citizens in an attempt to keep them safe from crowd as they are more susceptible to COVID-19 infection.
All these endeavors are likely to have helped the stock to gain investor optimism during the to-be-reported quarter. Moreover, these initiatives are expected to have strengthened Amazon’s competitive edge against retailers like Walmart (WMT - Free Report) and Kroger (KR - Free Report) in the quarter under review.
Retail Strategies & Prime Benefits: A Key Catalyst
Amazon’s strengthening global footprint in the retail market on the back of aggressive strategies, expanding seller and buyer base, distribution strength and robust online retail platform are expected to have driven the first-quarter performance.
In a bid to expand presence in India, the company entered into a long-term agreement with Future Retail in the beginning of the first quarter, which will authorize it as the official online sales channel for Future’s retail stores. Along with this, it announced $1 billion investment in the country.
Apart from these, the company’s growing physical presence primarily backed by rapidly expanding cashierless store Amazon Go and Amazon 4-star store is expected to get reflected in the to-be-reported quarter’s results.
Prime benefits, which include strong loyalty system, customer friendly offers, quick grocery delivery services, robust Prime Free One-Day and Prime Free Same-Day Delivery services, are expected to have aided Amazon’s customer momentum despite the coronavirus pandemic.
During quarter under review, the company expanded its Same-Day Delivery program by making same-day delivery service available in the cities of Philadelphia, Phoenix, Orlando and Dallas for Prime members. The company has also built mini-fulfillment centers, which are first of their kind buildings.
Apart from the Prime-based retail benefits, the strengthening original content and the overall portfolio on Prime Video is expected to have driven the Prime subscription during the to-be-reported quarter.
Strengthening AWS Services
Amazon’s expanding cloud services portfolio is expected to get reflected in the first-quarter results.
During the to-be-reported quarter, Amazon Web Services (AWS) collaborated with Conduent (CNDT - Free Report) , which offers a business process services. Per the deal, Conduent’s Maven has been made available on AWS in a bid to manage the coronavirus pandemic in an efficient way.
Further, AWS made its new security service namely Amazon Detective generally available to customers. Notably, the service helps customers to analyze, investigate and identify the source of security issues with the help of interactive visualizations by implementing machine learning, statistical analysis, and graph theory on the collected log data.
We believe all these moves are likely to have helped Amazon in winning customers. This, in turn, is expected to have driven AWS’ revenues in the quarter to be reported.
Expanding Smart Devices Portfolio
During first-quarter 2020, Amazon unveiled Fire TV Edition for Auto that allows direct integration of Fire TV into in-vehicle entertainment system. It provides access to rich content and shows from streaming services by utilizing vehicle’s Wi-Fi or LTE connection, mobile hotspot or any WAN-enabled device.
Further, the company introduced Fire TV Edition for Soundbars that power over 50 TV and soundbar models in more than 10 countries.
Additionally, Amazon unveiled Fire TV Edition for Operators, which allows television and telecommunication operators to offer Fire TV Edition devices.
All these smart devices and strengthening Alexa features are likely to have aided in delivering better user experience that is expected to get reflected in the company’s to-be-reported results.
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.1% per year.
These 7 were selected because of their superior potential for immediate breakout.
Image: Bigstock
Amazon (AMZN) to Report Q1 Earnings: What's in the Offing?
Amazon (AMZN - Free Report) is scheduled to report first-quarter 2020 results on Apr 30.
We note that the Zacks Consensus Estimate for first-quarter 2020 earnings currently stands at $6.35 per share, down 1.1% over the past 30 days. The figure suggests a decline of 10.4% from the year-ago quarter.
Further, Amazon expects first-quarter net sales between $69 billion and $73 billion. The figure is anticipated to improve in the range of 16-22% on a year-over-year basis. Management projects an unfavorable impact of approximately 5 basis points (bps) from foreign exchange rates.
Notably, the Zacks Consensus Estimate for net sales is pegged at $73.42 billion, which indicates an improvement of 22.9% from the prior-year quarter.
The company surpassed the Zacks Consensus Estimate in two of the trailing four quarters. It has a trailing four-quarter positive earnings surprise of 27.47%, on average.
Amazon.com, Inc. Price and EPS Surprise
Amazon.com, Inc. price-eps-surprise | Amazon.com, Inc. Quote
Consequences of the Coronavirus Outbreak
During the first quarter, Amazon witnessed a flurry of orders driven by customers’ unwillingness to visit offline stores on fears of contracting the novel coronavirus. This is likely to have contributed to the company’s performance in the quarter to be reported.
However, overflowing orders have been slowing down the delivery speed of Amazon. Further, delivery issues and rapidly spreading COVID-19 infection resulted in a temporary pause on the delivery of non-essential and luxury items during the to-be-reported quarter. This is likely to get reflected in the company’s first-quarter results.
Nevertheless, the e-commerce giant left no stone unturned to cater to the rising customer demand and promoting worker welfare amid the coronavirus pandemic.
The company’s hiring spree in a bid to improve delivery timings, and keeping the delivery vans and stores sanitized has been noteworthy.
Further, Amazon’s Whole Foods stores in United States, Canada and the U.K. dedicated an entire hour to serve only senior citizens in an attempt to keep them safe from crowd as they are more susceptible to COVID-19 infection.
All these endeavors are likely to have helped the stock to gain investor optimism during the to-be-reported quarter. Moreover, these initiatives are expected to have strengthened Amazon’s competitive edge against retailers like Walmart (WMT - Free Report) and Kroger (KR - Free Report) in the quarter under review.
Retail Strategies & Prime Benefits: A Key Catalyst
Amazon’s strengthening global footprint in the retail market on the back of aggressive strategies, expanding seller and buyer base, distribution strength and robust online retail platform are expected to have driven the first-quarter performance.
In a bid to expand presence in India, the company entered into a long-term agreement with Future Retail in the beginning of the first quarter, which will authorize it as the official online sales channel for Future’s retail stores. Along with this, it announced $1 billion investment in the country.
Apart from these, the company’s growing physical presence primarily backed by rapidly expanding cashierless store Amazon Go and Amazon 4-star store is expected to get reflected in the to-be-reported quarter’s results.
Prime benefits, which include strong loyalty system, customer friendly offers, quick grocery delivery services, robust Prime Free One-Day and Prime Free Same-Day Delivery services, are expected to have aided Amazon’s customer momentum despite the coronavirus pandemic.
During quarter under review, the company expanded its Same-Day Delivery program by making same-day delivery service available in the cities of Philadelphia, Phoenix, Orlando and Dallas for Prime members. The company has also built mini-fulfillment centers, which are first of their kind buildings.
Apart from the Prime-based retail benefits, the strengthening original content and the overall portfolio on Prime Video is expected to have driven the Prime subscription during the to-be-reported quarter.
Strengthening AWS Services
Amazon’s expanding cloud services portfolio is expected to get reflected in the first-quarter results.
During the to-be-reported quarter, Amazon Web Services (AWS) collaborated with Conduent (CNDT - Free Report) , which offers a business process services. Per the deal, Conduent’s Maven has been made available on AWS in a bid to manage the coronavirus pandemic in an efficient way.
Further, AWS made its new security service namely Amazon Detective generally available to customers. Notably, the service helps customers to analyze, investigate and identify the source of security issues with the help of interactive visualizations by implementing machine learning, statistical analysis, and graph theory on the collected log data.
We believe all these moves are likely to have helped Amazon in winning customers. This, in turn, is expected to have driven AWS’ revenues in the quarter to be reported.
Expanding Smart Devices Portfolio
During first-quarter 2020, Amazon unveiled Fire TV Edition for Auto that allows direct integration of Fire TV into in-vehicle entertainment system. It provides access to rich content and shows from streaming services by utilizing vehicle’s Wi-Fi or LTE connection, mobile hotspot or any WAN-enabled device.
Further, the company introduced Fire TV Edition for Soundbars that power over 50 TV and soundbar models in more than 10 countries.
Additionally, Amazon unveiled Fire TV Edition for Operators, which allows television and telecommunication operators to offer Fire TV Edition devices.
All these smart devices and strengthening Alexa features are likely to have aided in delivering better user experience that is expected to get reflected in the company’s to-be-reported results.
Currently, Amazon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Reply) stocks here.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.1% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>