Amazon (AMZN) CFO to Retire in 2015, Successor Named
Giant online retailer Amazon.com Inc. (AMZN) announced that its long-time chief financial officer ("CFO"), 53-year-old Tom Szkutak, will retire next June. The CFO will be succeeded by vice president of finance for Amazon’s global consumer business, Brian Olsavsky. However, investors seemed unaffected by the announcement as share price reaction to the news was muted.
Szkutak joined Amazon in October 2002 and in his 12-year tenure helped the company to expand its footprint into various product categories and geographies including Amazon Web Services and the Kindle e-book reader. Brian Olsavsky, 51, also joined the company in 2002 and will be working with Szkutak in the coming 10 months to guarantee smooth transition of CFO duties.
In the technology space, Szkutak is not the first CFO to retire in 2014. Apple Inc. (AAPL), Facebook Inc. (FB) and Twitter Inc. (TWTR) have all replaced their CFOs this year.
But the announcement comes when the e-tailer is facing certain amount of pressure from investors who are unimpressed with its huge investments and aggressive pricing strategies, which are impacting its profits.
While we expect investments to continue, we are seeing signs that they are beginning to have a positive impact on revenues. We continue to believe in Amazon’s prospects and expect Amazon to remain one of the leading players in the fast-growing e-commerce market. The online retail picture is shifting swiftly with devices playing an increasingly significant role.
Therefore, the Kindle platform remains a major growth driver for Amazon. In spite of more popular tablets from Apple, we think Amazon devices come with their own value offerings and therefore attract many developers to make more engaging apps, thereby driving revenues.
In addition, it recently acquired Twitch, a service that allows users to watch and broadcast video game play, in a bid to rival Google-owned YouTube’s live streaming of gameplay and competitive live streams.
However, Amazon currently has a Zacks Rank #4 (Sell) due to disappointing earnings in the past year. The average negative surprise for earnings was 43.77% in the last year. Majority of the analysts have downgraded their earnings estimate for the coming year as well.
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