After the close of trading today we’ll get earnings out of Amazon.com Inc.(NASDAQ: AMZN). The internet retail giant’s estimates from First Call are $0.26 non-GAAP EPS on $3.96 Billion. Estimates for next quarter are $0.28 EPS on $4.23 Billion in revenues and estimates for Fiscal Dec-2008 are $1.50 EPS on $19.6 Billion in revenues.
The company already gave guidance of $3.875 to $4.075 Billion in revenues for this quarter and $19.1 to $20.0 Billion in revenues for the year. As far as operating income, it guided $120 to $160 million (including $80 million in options and other GAAP expenses) for this quarter and $740 to $940 million (including $285 million in options and other GAAP expenses) for 2008.
Just like all retail, this has an extremely high emphasis on thecalendar fourth quarter because of all the holiday shopping. Thatmeans that if you tally everything up for the year so far and takecurrent estimates as a theoretical report you’d have roughly $7.275Billion in the Q4 revenues. Unfortunately we have to get through therest of summer and see how Joe Public fares out between now andThanksgiving before any determination can be made as to the health ofthe 2008 holiday.
So what we will have is a situation is one where the company stillfeels it can hit the numbers or one where Wall Street used too lofty ofexpectations. Either way, this last quarter isn’t a huge oneand everyone is going to be watching closely to what Mr. Bezos has tosay about the second half of this year and his expectations.
The biggest wild card here as far as we are concerned is the shippingaround that quarter. That is not likely to affect the top line asmuch, but is likely to make or break the margins for the year. Eitherway, the good news is that Amazon is now a bona fide retail giant thatis profitable and enviable on every metric out there.
As far as the factual metrics rather than the internals we monitor, here is what we have for today:
- Analysts are still positive on the stock with an average price target of roughly $87.00 (rounded up).
- Options may be tricky as an indicator because of today’s big price swings (and over 3weeks of time value), but it looks like options traders are braced fora move north of $5.00 in either direction.
- As far as the chart for support, this would have to fall south of$66.00 to break support that would get it to challenge $62.00 to $63.00which held as the lows back in March.
- As far as the chart for resistance, the stock recently failed to gomuch north of $72.00 and on a slightly longer basis it has failed toclose above $75.00 for this month and the end of June. For significantresistance in case the company has huge upside, this has majorresistance around $83.00 to 84.00 which acted as a level of failurethroughout May and June.
- For longer-term moving averages, the stock is tradingunder the 200-day moving average of $79.41 and under the 50-day movingaverage of $76.52. Its 20-day moving average is $71.59.
One last issue that we’ll be looking at closely we do want to pay special attention to its report on its Kindle e-book reader as well as how its integration of Audible.com (formerly ADBL on NASDAQ) is going. This will also be our first time to get to potentially hear formal predictions on what the early July announcement of the "Bill Me Later" partnership looks like.
If you have watched any financial media or any interviews with JeffBezos, you certainly know his laugh. With a softer economy and withshipping costs increasing, it’s unknown if you’ll hear him laughingtoday or not.
Jon C. Ogg
July 23, 2008
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