Amazon.com New Highs Fizzle on Earnings (AMZN)

Amazon.com Inc. (NASDAQ: AMZN) was hitting new all-time highs today before earnings.  The online e-tail giant posted $0.66 EPS on $7.13 billion in revenues versus $0.61 EPS and $6.87 billion in revenues.  There was a $185 million favorable impact from forex changes, so revenues are up 42% on apple to apples basis.

The operating cash flow was $2.78 billion, up from $1.76 billion a year ago; and free cash flow rose 62% to $2.32 billion versus $1.43 billion a year ago.

Amazon’s Q2 guidance is $6.1 billion to $6.7 billion in sales, up 31% to 44%, but compared to Thomson Reuters data of $6.43 billion.  Operating income is projected at between $220 million and $320 million up 39% to 102% (include the impact of Toysrus.com settlement of $51M) and includes about $130 million for stock options and other items.

Bezos said that Kindle remains its top-selling product and this week marked the 500,000 title mark.   Key metrics are as follows:

• North America segment sales rose 47% to $3.78 billion;
• International segment sales (U.K., German, Japanese, French and Chinese sites) rose 45% to $3.35 billion, or 37% excluding currency.
• Worldwide Media sales grew 26% to $3.43 billion, or up 22% ex-currency;
• Worldwide Electronics & Other General Merchandise sales grew 72% to $3.51 billion, or up 68% ex-currency.
• Amazon Web Services (AWS) lowered pricing for outbound data transfer by up to 40%.

Common shares outstanding plus shares underlying stock-based awards totaled 463 million on March 31, 2010, compared with 447 million a year ago.

Amazon.com closed up 2.5% at a high of $150.09 and the new 52-week and all-time high is $151.09 from earlier in the day.  Unfortunately, the after-hours reaction is treating this one without much fanfare as so much good news baked in.  The after-hours session shows Amazon down around the $142.50 mark, well under the $146.43 close on Wednesday.

Even in this bull market, stocks hitting new all-time highs have to do even better than great.

JON C. OGG