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What to Expect Ahead of Amazon's (AMZN) Q1 Earnings Release?

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Amazon AMZN is scheduled to report first-quarter 2022 results on Apr 28.

For the first quarter, the company expects net sales between $112 billion and $117 billion. The figure is anticipated to improve 3-8% on a year-over-year basis.

The Zacks Consensus Estimate for net sales is pegged at $117.02 billion, indicating growth of 7.8% from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for first-quarter earnings is pegged at $9.22 per share, which suggests a decline of 41.6% from the year-ago quarter’s reported figure.

Earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the same once, the average being 167.33%.

Amazon.com, Inc. Price and EPS Surprise

Amazon.com, Inc. Price and EPS Surprise
Amazon.com, Inc. Price and EPS Surprise

Amazon.com, Inc. price-eps-surprise | Amazon.com, Inc. Quote

Prime, Retail & Streaming Momentum to Note

Amazon’s expanding distribution network, and Prime-enabled fast delivery and robust grocery services are expected to have aided the performance of its online retail business in the first quarter.

Prime benefits, which include a strong loyalty system, customer-friendly offers, quick grocery delivery services, robust Prime Free One-Day and Prime Free Same-Day Delivery services, are expected to have aided Amazon’s customer momentum in the quarter under review.

The company’s aggressive stance on the core retail industry, especially grocery retail, is expected to have benefited the quarterly performance.

An expanding footprint of Amazon Fresh grocery stores across the United States is anticipated to have contributed well to the company’s grocery sales in the first quarter.

Amazon’s strengthening footprint in countries like India, Canada, the U.K. and Australia is expected to have bolstered its efforts toward expanding in the global retail market.

Coming to streaming services, a solid momentum across Prime Video is expected to have remained a major tailwind in the soon-to-be-reported quarter. Expanding original content, regional content and the overall content portfolio on Prime Video are expected to have driven the Prime subscription in the to-be-reported quarter.

Additionally, gains from the growing momentum across Amazon Music are expected to get reflected in the company’s first-quarter results.

AWS Portfolio Momentum to Consider

The company’s expanding Amazon Web Services (AWS) portfolio is expected to have benefitted the first-quarter performance.

In the said period, AWS expanded its HPC compute options by making Amazon Elastic Compute Cloud (Amazon EC2) Hpc6a instances generally available.

The company’s increasing number of availability zones and regions is also expected to have continued acting as a major tailwind.

AWS announced the completion of its first 16 AWS Local Zones in the United States in the to-be-reported quarter.

We expect all these initiatives to have helped Amazon win customers. This, in turn, is expected to have boosted AWS’s first-quarter revenues.

Smart Devices Portfolio Strength

Amazon’s expanding portfolio of Echo smart speakers is expected to have contributed well to its first-quarter performance.

Its strengthening portfolio of Fire TV is anticipated to have been beneficial.

Strengthening Alexa features are likely to have aided Amazon in delivering a better user experience.

Deepening focus on kids is likely to have been another positive. In the quarter under review, Amazon made its latest smart device for kids, namely Amazon Glow, available across the United States.

All these factors are expected to have aided the company’s quarterly performance.

What Our Model Says

Our proven model conclusively predicts an earnings beat for Amazon this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

It has an Earnings ESP of +37.95% and a Zacks Rank #3 at present.

Other Stocks to Consider

Here are some other stocks that you may consider, as our model shows that these too have the right combination of elements to beat on earnings this season.

Analog Devices ADI has an Earnings ESP of +2.17% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Analog Devices is scheduled to release second-quarter fiscal 2022 results on May 18. The Zacks Consensus Estimate for ADI’s earnings is pegged at $2.12 per share, suggesting an increase of 37.7% from the prior-year reported figure.

Cisco Systems CSCO has an Earnings ESP of +0.84% and a Zacks Rank #2 at present.

Cisco Systems is set to report third-quarter fiscal 2022 results on May 18. The Zacks Consensus Estimate for CSCO’s earnings is pegged at 86 cents per share, which suggests an increase of 3.61% from the prior-year reported figure.

HP HPQ has an Earnings ESP of +0.78% and a Zacks Rank #3 at present.

HP is scheduled to release second-quarter fiscal 2022 results on May 26. The Zacks Consensus Estimate for HPQ’s earnings is pegged at $1.06 per share, which suggests an increase of 13.98% from the prior-year reported figure.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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