Real Money’s Eric Jhonsa covers Amazon’s third-quarter earnings report and conference call with management.
Much like Meta Platforms (FB) – Get Meta Platforms Inc. Class A Report yesterday, Amazon.com (AMZN) – Get Amazon.com, Inc. Report might not have to deliver a very strong earnings report to please Wall Street, but simply one that’s better than feared, given current e-commerce headwinds.
Among analysts polled by FactSet, the consensus is for the e-commerce and cloud giant to report first-quarter revenue of $116.45 billion (+7% Y/Y) and GAAP EPS of $8.35 (down 47%).
Amazon shares quarterly sales and operating income guidance in its reports. The company’s second-quarter revenue consensus stands at $125.33 billion (up 11%), and its GAAP operating income consensus stands at $6.78 billion (down 12%).
Eric Jhonsa, Real Money’s tech columnist, will be live-blogging Amazon’s earnings report, which is expected after the bell, along with an earnings call scheduled for 5:30 P.M. Eastern Time. (Please refresh your browser for updates.)
4:45 PM ET: On the flip side, Amazon reported a $1.57B op. loss for its North American segment and a $1.28B op. loss for its International segment. Those numbers respectively compare with year-ago op. income of $3.45B and $1.25B.
4:44 PM ET: AWS remains a clear bright spot for Amazon: In addition growing 37% and topping its revenue consensus, the public cloud giant post Q1 op. income of $6.52B, up 57% Y/Y and soundly above a $5.62B consensus.
4:41 PM ET: Shipping costs rose 14% Y/Y to $19.56B. That’s up from 10% in Q4 and exceeded both Amazon’s North American and International growth rates (+8% and -6%, respectively).
4:39 PM ET: Amazon’s GAAP gross margin (GM) came in at 42.9%, up from 42.6% a year ago and slightly above a 42.7% consensus.
The company’s ongoing mix shift towards services revenue streams (AWS, seller services, ads, subscriptions) remains a GM tailwind, while heavy capex and shipping cost growth have been GM headwinds.
4:33 PM ET: Amazon’s headcount rose by 28% Y/Y to 1.62M. Also, unlike many prior years, headcount rose slightly relative to seasonally big Q4.
4:32 PM ET: Amazon’s Q1 sales by revenue stream:
Online stores (direct e-commerce) -3% Y/Y to $51.12B, below a $51.76B consensus
Third-party seller services (marketplace commissions, fulfillment services, etc.) +7% to $25.34B, above a $24.64B consensus
Subscription services (dominated by Prime fees) +11% to $8.41B, below an $8.61B consensus
Ad sales +23% to $7.88B, below an $8.18B consensus
Physical stores (dominated by Whole Foods) +17% to $4.59B, above a $4.29B consensus
“Other” revenue +26% to $661M, below a $1.08B consensus (might not be an up-to-date consensus # given accounting changes)
4:25 PM ET: Regarding Prime Day, Amazon says it’ll take place in July this year in more than 20 countries. Given that Prime Day took place in June last year, some analysts might’ve baked Prime Day sales into their Q2 revenue estimates.
4:22 PM ET: Here’s the earnings release.
4:20 PM ET: Amazon spent $2.67B on buybacks in Q1. Not a huge number for a company of its size, but still the first repurchases the company has made since 2012. A $10B buyback authorization was announced in March.
4:18 PM ET: Andy Jassy: “Today, as we’re no longer chasing physical or staffing capacity, our teams are squarely focused on improving productivity and cost efficiencies throughout our fulfillment network. We know how to do this and have done it before. This may take some time, particularly as we work through ongoing inflationary and supply chain pressures, but we see encouraging progress on a number of customer experience dimensions, including delivery speed performance as we’re now approaching levels not seen since the months immediately preceding the pandemic in early 2020.”
4:16 PM ET: Amazon is still off sharply: Shares are down 9.5% AH and making new 52-week lows, The operating income numbers might be more of a concern for markets than the top-line numbers, given pre-earnings expectations.
4:14 PM ET: Q1 GAAP operating income, which isn’t affected by the Rivian charge, came in at $3.67B. That’s down from $8.87B a year ago and below a $5.32B consensus.
4:11 PM ET: Amazon’s Q1 sales by segment:
North America +8% Y/Y to $69.22B, above a $68.04B consensus
International -6% to $28.76B, below a $30.1B consensus
AWS +37% to $18.44B, above an $18.34B consensus
Notably, International growth saw a 6-point forex hit. That compares with a 4-point hit in Q4.
4:06 PM ET: Notably, Amazon says its Q2 sales guidance assumes Prime Day occurs in Q3 this year. It took place in Q2 last year.
4:06 PM ET: Amazon is guiding for Q2 operating income of negative $1B to positive $3B, below a consensus of $6.78B.
4:04 PM ET: Shares are down 9.8% after-hours to $2,610.
4:03 PM ET: For Q2, Amazon is guiding for revenue of $116B-$121B, below a $125.33B consensus.
4:02 PM ET: Results are out. Revenue of $116.44B is roughly in-line. EPS is officially negative $7.56, but that’s due to a $7.6B charge related to Amazon’s investment in Rivian.
4:00 PM ET: Amazon’s stock rose 4.7% today heading into its report amid a broad tech rally, but still down 13% YTD and 16% over the last 12 months. Results should be out any minute.
3:55 PM ET: The FactSet consensus is for Amazon to report Q1 revenue of $116.45B and GAAP EPS of $8.35.
For Q2, Amazon’s revenue consensus is at $125.33B. It’s possible that informal expectations are lower, given what’s been reported lately about e-commerce trends.
3:52 PM ET: Hi, this is Eric Jhonsa. I’ll be live-blogging Amazon’s Q1 report and call.
