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Here's What to Expect from Amazon's (AMZN) Q1 2019 Earnings Results

Benjamin Rains

Amazon AMZN saw its stock price dip roughly 1% during regular trading hours on Wednesday, just one day before the firm is scheduled to release its first-quarter fiscal 2019 financial results. Despite the slip, shares of Amazon have soared in 2019, along with Facebook FB, Netflix NFLX, and other tech powers.

So, let’s see what to expect from Amazon’s earnings and revenue results after the closing bell on Thursday.

Quick Overview

Jeff Bezos’ firm is set to see a significant top-line slowdown, with the law of large set to play its part. Nonetheless, Amazon is projected to see its share of the total U.S. e-commerce market reach 52.4% in 2019, up from 48% last year, according to eMarketer. Meanwhile, AWS grabbed approximately 32% of cloud market share last year, which helped it easily surpass second place Microsoft’s MSFT 14%, along with IBM IBM, Google GOOGL, and Alibaba BABA.

Amazon is also reportedly set to expand its brick-and-mortar business beyond Whole Foods, bookstores, and its cashierless Amazon Go stores, to further challenge Walmart WMT, Target TGT, and Kroger KR. Plus, AMZN’s digital advertising business is now the third-largest in the U.S. behind only Google and Facebook. Furthermore, Amazon Prime Video is a major player in the streaming TV market and looks poised to compete alongside Netflix NFLX, Hulu, and soon enough Disney DIS, AT&T T, and Apple AAPL, for years to come.

With all these growth opportunities in mind, shares of Amazon have popped roughly 28% in 2019. The e-commerce giant closed regular trading Wednesday at $1,901.75 a share, down roughly 7% off its 52-week high of $2,050.50.

 

 

Q1 Outlook & Earnings Trends

Amazon’s Q1 revenue is projected to climb 16.95% to reach $59.69 billion, based on our current Zacks Consensus Estimate. As we touched on earlier, this would mark a slowdown from Q4’s roughly 20% top-line expansion, which itself was down huge compared to Q3 2018’s 29% climb, Q2’s 39% surge, and Q1’s 43% jump. In fact, the fourth quarter of 2018 was Amazon’s smallest top-line expansion since 2015.

At the bottom end of the income statement, Amazon’s adjusted Q1 earnings are expected to surge approximately 41% to reach $4.61 per share. AMZN’s short-term earnings estimate revision activity has been mixed recently, with its 2020 estimate revision activity trending more positive. Investors should also note that the Seattle-based giant boasts a strong history of quarterly earnings beats. This includes an 89% average surprise over the trailing four quarters.

 

 

Bottom Line

Amazon is a Zacks Rank #2 (Buy) right now, based largely on its longer-term earnings estimate revisions. In the end, Wall Street and investors might focus on Amazon’s AWS performance, along with any Prime and digital advertising updates Thursday, as massive top-line growth becomes harder to come by.

The company is set to release its first-quarter 2019 financial results after the closing bell on Thursday, April 25. Make sure to head back to Zacks after Amazon reports for a complete breakdown of the company’s actual quarterly metrics.

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