The coronavirus outbreak has impacted lives, resulting in widespread implementation of social distancing and lockdown measures. However, no company has gained from the pandemic as much as Amazon.com, Inc (AMZN Quick QuoteAMZN - Free Report) .

 

To put things into perspective, the e-commerce giant’s market capitalization has jumped more than $90 billion since mid-February, adding $5 billion to the fortunes of founder Jeff Bezos who incidentally owns an 11% stake in the company. Additionally, Amazon's stock is up 28.4% so far this year against the broader S&P 500’s decline of 11.4%.

 

 

Notably, expectations are high as Amazon gears up to report first-quarter earnings results on Apr 30, after the closing bell. And why not? The widespread lockdowns have boosted online shopping, working wonders for Amazon which dominates the global online shopping platform, offering everything, from household items to groceries. 

 

The current stay-at-home orders are also compelling people to work from home, carry out online classes or stream videos. And Amazon surely has made the most of this rise in Internet usage. Let us thus look at how the Seattle-based company will fare in first-quarter earnings today – 

 

 

Amazon’s e-commerce sales were certainly through the roof in the first quarter as people weren’t going to brick-and-mortar stores to do bulk of their shopping amid the coronavirus outbreak. 

 

In fact, the company’s orders for necessary goods increased so much in the said quarter that Amazon warned customers of delays in two-day Amazon prime deliveries. And in order to fulfil such orders, the company had announced plans to hire 100,000 extra distribution workers in the first quarter. A few weeks later, when those slots got filled up, Amazon shared plans to hire 75,000 more. What’s more, Amazon has suspended its shipping program in the United States so that it can manage the spike in online orders.

 

Now, given the surge, first-quarter revenues are expected at $73.96 billion, suggesting a 23.9% rise from year-ago levels.

 

 

However, with an array of products, including hand sanitizers, groceries, office chairs and home exercise equipment being offered on the website, Amazon had to increase its warehouse capacity in the first quarter which bumped up costs. Hence, earnings per share for the first quarter are projected to drop 11% to $6.31 from the same period last year.

 

 

Having said that, the Zacks Rank #3 (Hold) company also has an Earnings ESP of +2.01%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

A positive Earnings ESP and a solid Zacks Rank indicate that the stock has the best chance to come up with a positive surprise in its upcoming earnings announcement. 

 

After all, the current work-from-home scenario has increased the need for cloud storage, something that bodes well for Amazon Web Services. Stay-at-home orders also bolstered its streaming business, with Amazon Prime Video ranked only second to Netflix, Inc (NFLX Quick QuoteNFLX - Free Report) in terms of popularity among Americans based on streaming from Mar 16 to Apr 5, per Reelgood, a film and TV streaming search engine service.

 

And like Amazon, Apple Inc. (AAPL Quick QuoteAAPL - Free Report) is scheduled to report second-quarter fiscal 2020 earnings on Apr 30, after market close. But Apple’s earnings will be all about evaluating the damage from the coronavirus.

 

 

Apple, in particular, has been vulnerable to supply chain disruptions and subsequently the economic shock caused by the pandemic.

 

The outbreak forced Apple to shut down its own as well as partners’ stores in the quarter ending March 2020, which has certainly impacted revenues. Apple’s supply also got disrupted due to slower-than-expected return to work in China after an extended New Year holiday aimed at curtailing the spread of the virus. What’s more, the virus spread in the United States toward the end of March.

 

But some may argue that Apple did open some stores in Asia and factories have resumed production in the first quarter. But its anybody’s guess whether consumers would have bought the newest iPhone models at a time when their purchasing power has been severely affected by the economic meltdown. In fact, in the United States itself, the first-quarter GDP contracted at a 4.8% annualized pace, its steepest drop since 2008 and the first contraction since 2014.

 

Apple’s earnings for the March quarter are expected to decline 15% on 7.5% lower revenues from the year-earlier period. The Zacks Rank #3 company has an Earnings ESP of -0.27%, which dims chances of a beat.

 

 

 

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