From Seeking Alpha:
After the bell on Thursday, shares of Amazon fell about 4% after the company reported fourth-quarter results. Overall, the period was mixed, with a revenue miss but a bottom-line beat. The company still is spending too much on the operating side, and poor guidance will definitely take a chunk out of the growth narrative.
While $43.7 billion in revenues seems like a lot, it missed Street estimates by about a billion dollars. AWS is down to 47% year-over-year growth from 69% in the year-ago period, thanks to a much higher base number. Additionally, the company gave this guidance, which was extremely disappointing:
- Net sales are expected to be between $33.25 billion and $35.75 billion or to grow between 14% and 23% compared with first quarter 2016. This guidance anticipates an unfavorable impact of approximately $730 million or 250 basis points from foreign exchange rates.
- Operating income is expected to be between $250 million and $900 million compared with $1.1 billion in the first-quarter 2016.
. . . .
I mentioned Q4 showed an earnings beat, but that doesn’t tell the story. The company continued its gross margin improvement, up 189 basis points over the prior year period. However, significant operating expense growth continued, headlined by a more than 43% increase in marketing expense and nearly 84% increase in general and administrative expense. Net shipping costs rose by 43%, much faster than the rise in revenues.
Link to the rest at Seeking Alpha
When traders buy expecting certain results, it’s reasonable for them to sell when those returns are nor realized.
When traders buy expecting unreasonable results predicted by persons with a poor track record of prediction, they have only themselves to blame.
They don’t care who is to blame.
Think the computer cares what Amazon suppliers think?
They sell, and go on to the next trade.
“AWS is down to 47% year-over-year growth”
That’s it. Heads must roll!
I have to get me a business where I can “only” make $43 billion.
First thing to do is figure out the difference between revenue and profit.
First thing to do is figure out the difference between revenue and profit.
As the ‘Street’ has never gotten good at guessing what Amazon is going to do next, I’d suggest their tea readers change brands.