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Amazon (AMZN) Set to Report Q2 Earnings: What's in the Offing?
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Amazon (AMZN - Free Report) is scheduled to report second-quarter 2022 results on Jul 28.
For the second quarter, the company expects net sales between $116 billion and $121 billion. Net sales are expected to grow 3-7% year over year.
The Zacks Consensus Estimate for net sales is pegged at $119.72 billion, indicating growth of 5.9% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for second-quarter earnings is pegged at 15 cents per share, which suggests a decline of 80.3% from the year-ago quarter’s reported figure. The figure has moved 7.1% upward over the past 30 days.
Earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters and missed the same twice, the average being 138.98%.
A slowdown in online shopping activities, ongoing inflationary pressure, elevated staffing costs and supply-chain disruptions are likely to have been concerning. Yet, Amazon’s strengthening distribution network, and Prime-enabled fast delivery and grocery services are expected to have aided the performance of its e-commerce business in the to-be-reported 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.
In the second quarter, the company unveiled a Prime benefit called Buy with Prime, which allows Prime members in the United States to shop directly from merchants’ online stores and avail of fast and free delivery service, smooth checkout experience, and easy returns. This is expected to have encouraged Prime subscriptions.
Apart from these, the company’s aggressive stance on the core retail industry, especially grocery retail, is expected to have benefited the quarterly performance.
The company’s strengthening e-commerce business worldwide, along with the expanding global footprint of Prime, are expected to have contributed well.
Its aggressive stance on bolstering the physical presence is expected to have benefited the quarterly performance.
An increasing number of Amazon Fresh grocery stores, 4-star stores and Amazon Go outlets across the United States is anticipated to have contributed well to the company’s sales in the second quarter.
The company’s deepening focus on fashion retail is expected to have been another positive. Amazon rolled out an augmented reality (AR)-powered interactive mobile experience, ‘Virtual Try-On for Shoes,’ which enables customers to check the look of a pair of shoes on them virtually. The move is likely to have offered an enhanced experience to online shoe shoppers.
Coming to streaming services, a solid momentum across Prime Video is expected to have been 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.
Gains from the growing momentum across Amazon Music are expected to get reflected in the company’s second-quarter results.
AWS Portfolio Momentum to Consider
The company’s expanding Amazon Web Services (“AWS”) portfolio is expected to have benefitted the second-quarter performance.
In the said period, AWS made its Graviton3 processor-backed Amazon Elastic Compute Cloud (Amazon EC2) C7g instances generally available. Further, it announced the general availability of AWS Mainframe Modernization.
Amazon announced the general availability of AWS IoT TwinMaker, which helps in the quick creation of digital twins of devices, equipment and processes.
The company made its new visual development environment — AWS Amplify Studio, which enables web application user interface creation with minimal coding — generally available.
It announced the general availability of Amazon Aurora Serverless v2, which automatically scales hundreds of thousands of transactions in a fraction of a second.
Amazon announced the general availability of its managed wide area network (WAN) service, AWS Cloud WAN, which aids in the seamless development, management, operation and monitoring of a global network with the help of a central dashboard.
We expect all these initiatives to have helped Amazon win customers. This, in turn, is expected to have boosted AWS’s second-quarter revenues.
Smart Device Portfolio Strength
Amazon’s expanding portfolio of Echo smart speakers is expected to have contributed well to its second-quarter performance.
Its strengthening portfolio of Fire devices is anticipated to have been beneficial. In the second quarter, the company unveiled next-generation Fire 7 and Fire 7 Kids tablets.
Strengthening Alexa features are likely to have aided Amazon in delivering a better user experience.
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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Amazon has an Earnings ESP of +34.09% and a Zacks Rank #3 at present.
Other Stocks to Consider
Here are some other stocks that you may also consider, as our model shows that these too have the right combination of elements to beat on earnings this season.
Aspen Technology is set to report fourth-quarter fiscal 2022 results on Aug 8. The Zacks Consensus Estimate for ASPN’s earnings is pegged at $2.15 per share, which suggests an increase of 40.5% from the prior-year period’s reported figure.
Keysight Technologies (KEYS - Free Report) has an Earnings ESP of +1.23% and a Zacks Rank of 2 at present.
Keysight Technologies is scheduled to release third-quarter fiscal 2022 results on Aug 17. The Zacks Consensus Estimate for KEYS’ earnings is pegged at $1.79 per share, suggesting an increase of 16.2% from the prior-year fiscal quarter’s reported figure.
Advanced Micro Devices (AMD - Free Report) has an Earnings ESP of +2.14% and a Zacks Rank of 3 at present.
Advanced Micro Devices is scheduled to release second-quarter 2022 results on Aug 2. The Zacks Consensus Estimate for AMD’s earnings is pegged at $1.03 per share, suggesting an increase of 63.5% from the prior-year quarter’s reported figure.
Image: Bigstock
Amazon (AMZN) Set to Report Q2 Earnings: What's in the Offing?
Amazon (AMZN - Free Report) is scheduled to report second-quarter 2022 results on Jul 28.
For the second quarter, the company expects net sales between $116 billion and $121 billion. Net sales are expected to grow 3-7% year over year.
The Zacks Consensus Estimate for net sales is pegged at $119.72 billion, indicating growth of 5.9% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for second-quarter earnings is pegged at 15 cents per share, which suggests a decline of 80.3% from the year-ago quarter’s reported figure. The figure has moved 7.1% upward over the past 30 days.
Earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters and missed the same twice, the average being 138.98%.
Amazon.com, Inc. Price and EPS Surprise
Amazon.com, Inc. price-eps-surprise | Amazon.com, Inc. Quote
Prime, Retail & Streaming Momentum to Note
A slowdown in online shopping activities, ongoing inflationary pressure, elevated staffing costs and supply-chain disruptions are likely to have been concerning. Yet, Amazon’s strengthening distribution network, and Prime-enabled fast delivery and grocery services are expected to have aided the performance of its e-commerce business in the to-be-reported 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.
In the second quarter, the company unveiled a Prime benefit called Buy with Prime, which allows Prime members in the United States to shop directly from merchants’ online stores and avail of fast and free delivery service, smooth checkout experience, and easy returns. This is expected to have encouraged Prime subscriptions.
Apart from these, the company’s aggressive stance on the core retail industry, especially grocery retail, is expected to have benefited the quarterly performance.
The company’s strengthening e-commerce business worldwide, along with the expanding global footprint of Prime, are expected to have contributed well.
Its aggressive stance on bolstering the physical presence is expected to have benefited the quarterly performance.
An increasing number of Amazon Fresh grocery stores, 4-star stores and Amazon Go outlets across the United States is anticipated to have contributed well to the company’s sales in the second quarter.
The company’s deepening focus on fashion retail is expected to have been another positive. Amazon rolled out an augmented reality (AR)-powered interactive mobile experience, ‘Virtual Try-On for Shoes,’ which enables customers to check the look of a pair of shoes on them virtually. The move is likely to have offered an enhanced experience to online shoe shoppers.
Coming to streaming services, a solid momentum across Prime Video is expected to have been 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.
Gains from the growing momentum across Amazon Music are expected to get reflected in the company’s second-quarter results.
AWS Portfolio Momentum to Consider
The company’s expanding Amazon Web Services (“AWS”) portfolio is expected to have benefitted the second-quarter performance.
In the said period, AWS made its Graviton3 processor-backed Amazon Elastic Compute Cloud (Amazon EC2) C7g instances generally available. Further, it announced the general availability of AWS Mainframe Modernization.
Amazon announced the general availability of AWS IoT TwinMaker, which helps in the quick creation of digital twins of devices, equipment and processes.
The company made its new visual development environment — AWS Amplify Studio, which enables web application user interface creation with minimal coding — generally available.
It announced the general availability of Amazon Aurora Serverless v2, which automatically scales hundreds of thousands of transactions in a fraction of a second.
Amazon announced the general availability of its managed wide area network (WAN) service, AWS Cloud WAN, which aids in the seamless development, management, operation and monitoring of a global network with the help of a central dashboard.
We expect all these initiatives to have helped Amazon win customers. This, in turn, is expected to have boosted AWS’s second-quarter revenues.
Smart Device Portfolio Strength
Amazon’s expanding portfolio of Echo smart speakers is expected to have contributed well to its second-quarter performance.
Its strengthening portfolio of Fire devices is anticipated to have been beneficial. In the second quarter, the company unveiled next-generation Fire 7 and Fire 7 Kids tablets.
Strengthening Alexa features are likely to have aided Amazon in delivering a better user experience.
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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Amazon has an Earnings ESP of +34.09% and a Zacks Rank #3 at present.
Other Stocks to Consider
Here are some other stocks that you may also consider, as our model shows that these too have the right combination of elements to beat on earnings this season.
Aspen Technology (AZPN - Free Report) has an Earnings ESP of +1.40% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Aspen Technology is set to report fourth-quarter fiscal 2022 results on Aug 8. The Zacks Consensus Estimate for ASPN’s earnings is pegged at $2.15 per share, which suggests an increase of 40.5% from the prior-year period’s reported figure.
Keysight Technologies (KEYS - Free Report) has an Earnings ESP of +1.23% and a Zacks Rank of 2 at present.
Keysight Technologies is scheduled to release third-quarter fiscal 2022 results on Aug 17. The Zacks Consensus Estimate for KEYS’ earnings is pegged at $1.79 per share, suggesting an increase of 16.2% from the prior-year fiscal quarter’s reported figure.
Advanced Micro Devices (AMD - Free Report) has an Earnings ESP of +2.14% and a Zacks Rank of 3 at present.
Advanced Micro Devices is scheduled to release second-quarter 2022 results on Aug 2. The Zacks Consensus Estimate for AMD’s earnings is pegged at $1.03 per share, suggesting an increase of 63.5% from the prior-year quarter’s reported figure.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.