AMZN already gave a sandbagged guidance range: They indicated they will generate sales of $20.25 billion to $22.75 million and earn a $490 million loss to a $310 million profit ( consensus estimate 27 cents). You know they are going to forecast a number they can easily beat...They understand the game of underpromising in order to overdeliver. Look for AMZN to reach sales of $24 billion and earnings of 54 cents.
what's the basis for your expected monster beat on eps? there is ample reason to believe they will fail badly on the eps front.
the last 4 esp results:
Dec 11 = 0.38
Mar 12 = 0.28
Jun 12 = 0.01
Sep 12 = -0.60
notice a trend???
how exactly are they going to hit 0.54???
Other reasons they won't:
1) operating and net margins are declining
2) they started to collect sales tax in CA, PA and TX
3) the holiday season has widely been reported as disappointing
4) competition has offered to match prices
5) yoy online sales growth is 14% --- amzn is expected to increase yoy rev by 27%
6) their rev growth is decelerating
7) the unit rev per shipment is declining while unit shipping costs are flat to up... thus negatively impacting margins
8) they have droped prices on their cloud services
shall I go on???
the consensus eps opinion for the upcoming report is 0.27 (which is a yoy from of 0.11)
they will miss the 0.27 as well.
one more thing... even if they hit the 0.27 eps they will have negative earnings for the year.
So, correct me if I'm wrong, but total retail sales went up 5B.
AMZN last year rev was 17.43B. For them to hit 22.5B in rev this year, they would have to essentially grabbed essentially all the growth reported by Comscore and everyone else stay stagnant?
Considering BBY reported gains in a number of places and ChannelAdvisor reported AMZN CA (lots of folks) spending dipped during a critical shopping period along with the fact they had to cut their cloud services (growth driver) by some 20-28%, I think the thesis that AMZN will missed revenue estimates is correct.
Factor in that Bezos said AMZN does not optimize for margin, that means profits probably took a serious hit too...just to not lose sales somewhat?
If AMZN revenues come in anywhere near 21B and with EPS almost certainly in the dump, I think we will be looking at a stock price below 200.