SunTrust Sees Amazon Boosting Q3 Outlook Next Week

Amazon AMZN is likely to boost its outlook based on the launch of its Fire phone when it posts second-quarter results, one analyst said.

SunTrust's Robert Peck expects a strong second quarter in line with Street views when Amazon reports on July 24, but the company's guidance may prove more interesting.

Regardless of the Fire phone's long-term viability, "investors need to bake in some sales for the third quarter," Peck said in a note. "This should imply that third-quarter guidance will be higher than the Street."

Analysts on average expect a third-quarter loss of $0.05 per share on revenue of $20.82 billion.

Peck said although the phone won't be available for the full third quarter, it should add at least $400,000 to revenue for the period.

Also awaited is the outlook for Amazon's Web services segment, which recently unveiled several new wrinkles. Peck noted that competitor Box recently announced unlimited storage for $15 per month, compared with Amazon's offering of 500 gigabytes at the same price.

For the recent second quarter, the Amazon consensus calls for a loss of $0.15 per share, on revenue of $19.34 billion.

Peck said Amazon's same-store sales in California are up nearly 30 percent and the figure has proven a solid proxy for Amazon's North American same-store sales.

Peck rates the stock a Buy with a target of $425.

Amazon traded recently at $353.29, down about 0.66 percent.