What to expect when Amazon reports first quarter results
Amazon (AMZN) is set to report first-quarter results after market close Thursday. The results come after a 30% run-up in the stock this year, as consumers increasingly turned to the e-commerce company for deliveries of essentials amid widespread stay-in-place orders.
Here are the main metrics expected from the report, compared to consensus estimates compiled by Bloomberg:
-
1Q net sales: $73.74 billion expected, vs. $59.7 Y/Y
-
1Q GAAP EPS: $6.27 expected, vs. $7.09 Y/Y
-
1Q gross margin: 42.6% expected, vs. 43.2% Y/Y
Amazon has been one of the few companies fortified by the global coronavirus pandemic, with its extensive everyday goods and grocery delivery options making it a popular choice as consumers remained confined to their homes. North American and global retail sales are expected to jump 28.4% and 24.3%, respectively, during the first quarter over last year.
During the quarter, Amazon sought out well over 100,000 new workers to keep pace with orders, in a testament to the ballooning demand for products off the online marketplace. The company also raised pay for many of its workers.
Las Vegas – Circa July 2017: Amazon.com Fulfillment Center. Amazon is the Largest Internet-Based Retailer in the United States II
“We expect Amazon to report strong 1Q revenue growth with accelerating growth outlook in 2Q as consumers shift to online purchases,” Raymond James analyst Aaron Kessler wrote in a note ahead of results. “We believe the profit outlook will be more mixed as stronger revenue growth will likely be offset with much higher expenses near-term (higher shipping, hourly employee costs).”
The focal points for this quarter will be around Amazon’s retail revenue growth outlook for the second quarter, ability to meet surging consumer demand and margin outlook as shipping and employee costs increase, Kessler added.
Amazon may have seen a boost in its higher margin Amazon Web Services (AWS) cloud computing business as a large portion of the country’s workforce began working from home during the first quarter. Still, Amazon lost out on a major cloud contract with the U.S. Department of Defense to Microsoft, getting dealt a blow as Microsoft builds up its competing Azure platform.
“We see AWS as top unknown,” Bank of America analysts wrote in a note. “Commentary on 2Q trends (if any) [will be] very important for stock reaction given limited visibility.”
This post will be updated with results after market close Thursday.
—
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
Read more from Emily:
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and reddit.
Find live stock market quotes and the latest business and finance news