As earnings are released, can you get lost in Amazon?
As the world breathlessly awaits Amazon’s earnings numbers today, the question is whether the company’s financial performance can – if ever – match its stock performance.
Analysts are expecting revenues of $15.7 billion for the second quarter of 2013. That’s almost 23% more than last year at this time for the online retailer. Yet on the bottom line, Wall Street is anticipating earnings of $0.05 per share. Last year this quarter, the company barely broke even and it may very well be the case this year as well.
In fact, from April 2012 to March 2013, the company didn’t break even at all, losing $87 million on nearly $64 billion in revenues. So, while the company may have lost money, they made it up in volume. And, the market is apparently awarding Amazon for it; the stock is up 19% this year alone.
Amazon is now aggressively going after streaming video, including snatching Viacom content away from Netflix for its Amazon Prime service. That doesn’t mean its rivals are sitting back, though. Netflix responded with a deal with DreamWorks and now Google has introduced its “Chromecast” device as it gets into the streaming video business as well.
So, is Amazon’s future impossible for investors to navigate?
"If you can't understand a company," warns Talking Numbers host Brian Sullivan, "you may want to think twice before investing in it. That's just my own personal take. Julian Robertson (formerly of Tiger Management) sorta felt the same way about tech stocks about 12 years ago."
Meanwhile, Talking Numbers contributor Enis Taner, Global Macro Editor at RiskReversal.com, and JC O’Hara, Chief Market Technician at FBN Securities, weigh in on what’s next ahead of earnings.
To see Taner and O’Hara analyze Amazon, watch the video above.