Amazon Faces Falling Expectations As Earnings Loom

Amazon.com, Inc. AMZN is scheduled to report its first quarter financial results on Thursday, after market close.

According to Estimize, Wall Street analysts project consensus EPS of ($0.14) on revenue of $22.417 billion. The crowd is substantially less bearish, and expects EPS of $0.00 on revenue of $22.551 billion.

For its part, the company did not provide guidance on earnings, but did guide revenue of $21.9 billion.

These estimates imply a noticeable decline from earnings of $0.23 per share in the same quarter last year, and an even larger fall from last quarter’s $0.45 mark.

Related Link: 4 Questions Amazon Must Answer

The graph below shows Amazon’s history of estimates versus actual earnings:

It's also possible to chart earnings expectations over the quarter.

Related Link: Bank Of America: Watch This Twist In Amazon's Earnings

Both the crowd and Wall Street analysts have been losing confidence in Amazon since January. Consensus estimates have been falling -- consistently -- since the beginning of the year, and now stand at their lowest point this quarter.

What Analysts Are Saying

Unlike what was seen above, analysts at Morgan Stanley remain bullish on Amazon. The firm outlines four questions it thinks management should answer in the earnings call:

1)   How (un)profitable is Amazon Web Services?

2)   Is North America retail already more profitable than Walmart?

3)   What was the impact of the AWS 7-40 percent price cuts?

4)   Will Q2 CSOI guidance indicate improving profitability?

Amazon reports earnings after the close; its conference call is expected at 5:30pm ET.