Amazon Soars on Earnings and Guidance Beat, Results Seen as ‘Terrific’
2022.07.29 12:42
Amazon (AMZN) Soars on Earnings and Guidance Beat, Results Seen as ‘Terrific’
By Senad Karaahmetovic
Shares of Amazon (NASDAQ:AMZN) are up over 12% in premarket Friday after the company delivered a strong set of Q2 results and guidance.
Although Amazon reported a loss of 20 cents per share, much worse than the average analyst estimate of 13 cents per share, revenue soared 7.2% on a YoY basis to $121.23 billion, better than the $119.53 expected.
AWS delivered another beat as sales came in at $19.74 billion on a 33% annual growth. Wall Street was expecting $19.41 billion in generated sales from AWS.
For this quarter, Amazon said it expects to see net sales between $125 billion and $130 billion with the midpoint coming in better than the consensus of $126.97 billion. Amazon also projects to record an operating income of between $0 and $3.5 billion, worse than the estimate of $3.83 billion.
“Despite continued inflationary pressures in fuel, energy, and transportation costs, we’re making progress on the more controllable costs we referenced last quarter, particularly improving the productivity of our fulfillment network,” CEO Andy Jassy said in a statement.
Jassy also discussed investments that Amazon made recently, including Grubhub delivery, NFL Thursday Night Football, and the release of The Lord of the Rings: The Rings of Power on September 2”
Vital Knowledge analysts said Amazon delivered a “terrific report” with guidance seen as “very encouraging.
“There was a ton of anxiety around this Amazon report given consumer headwinds and concerns that the AWS unit could see softness given its exposure to tech startups, but the results were solidly better on both the top and bottom line,” analysts wrote in a note.
For a Goldman Sachs analyst, Amazon delivered a “solid” set of results.
“With a successful 2-day Prime Day event in July and mgmt dismissing end demand its core businesses, we see Amazon well positioned to produce a strong revenue growth narrative in 2H’22,” the analyst wrote in a client note.
The analyst also hiked the price target to $175 per share from the prior $170 and reiterated his long-term bullish stance on Amazon.
“Looking over a multi-year timeframe, we reiterate our view that Amazon will compound a mix of solid revenue trajectory with expanding margins as they deliver yield/returns on multiple year investment cycles.”
