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Amazon Dips on Lower 1st-Quarter Revenue Growth

- By James Li

Amazon.com Inc. (AMZN), the Seattle-based e-commerce giant, said on Thursday that revenue for the quarter ending March 2018 increased 17% from the prior-year quarter.

The online retailer reported net income of $3.6 billion, or $7.09 per diluted share, up $2.37 from the analyst estimate of $4.72.

Company reports revenue deceleration in both domestic and international markets


CNBC columnist Eugene Kim said Amazon's 17% net sales growth represented the "slowest expansion" since first-quarter 2015, when net sales increased just 15%. Net sales growth in domestic markets and international markets increased 17% and 9%, down from 46% and 34% during first-quarter 2018.

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Management said during the earnings call one likely reason for the lower growth in international markets was a "quiet period" in India. Although unit growth was just 10% for the quarter, the unit growth excludes Amazon's fast-growing businesses like Amazon Web Services, which increased 41% year over year.

Margins remain strong yet stock slightly falls

Amazon closed at $1,902.25, giving a market cap of $936.01 billion. Despite this, the stock fell to a low of $1,901.75 in after-hours trading.

As of Thursday, Bill Gates (Trades, Portfolio)' Microsoft Corp. (MSFT) and Warren Buffett (Trades, Portfolio)'s top holding Apple Inc. (AAPL) are the two most valuable companies in the U.S., with market caps of $990.87 billion and $967.95 billion.

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GuruFocus ranks Amazon's profitability 9 out of 10 on several positive signs, which include expanding profit margins, a strong Piotroski F-score of 7 and a business predictability rank of four stars. The company's three-year revenue growth rate of 29.60% and three-year Ebitda growth rate of 50% are outperforming over 90% of global competitors.

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Gurus with large positions in Amazon include Ken Fisher (Trades, Portfolio), Spiros Segalas (Trades, Portfolio) and Chase Coleman (Trades, Portfolio)'s Tiger Global Management.

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Disclosure: No positions.

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This article first appeared on GuruFocus.