UBS: Questions Regarding Whether Amazon's Profitability Is Sustainable

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Eric Sheridan from UBS, and Nick Bilton from New York Times, were on CNBC Friday to discuss fourth-quarter earnings of Amazon.com, Inc. AMZN and its long-term prospects.

 

“Obviously we saw excellent trajectory on Amazon Prime,” Sheridan said. “We think that is a positive thing that came out of the print. As a result of that you saw stability and revenue growth this quarter and then they implied guide for Q1, it certainly seems some of the decelering revenue trend […] of at least died down a little bit for the top-line and the shares are responding to just a little bit better profitability.”

 

He continued, “I think, there are some questions though whether that profitability is sustainable or whether we are seeing a lock stock improvement going forward. I think that’s still the opening debate on Amazon here.”

 

Is Amazon’s Improved Margin A Blip?

 

“Well, I think it’s entirely up to Jeff Bezos, he gets to put all the levers and decide what goes where and that’s very apparent,” Bilton said. “I think, last quarter was not good for them, people were saying that the company was in trouble and this quarter they turned around and said it was different. I think, one of the things that’s really interesting about Amazon is I think the company really comes down to Prime.”

 

“ They are looking at not the future, but they are looking at pizza delivery essentially, which is this thing that can be delivered in 30 minutes. Amazon is trying to figure out how to do that and I think that’s going to be the future of their business especially for the next year as they experiment with all these different delivery methods that they are using now.”

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Posted In: CNBCMedia
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