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Amazon Q3 Earnings Preview: Keep An Eye On AWS

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Amazon Q3 Earnings Preview: Keep An Eye On AWS

Amazon.com, Inc. (NASDAQ: AMZN) is expected to report third-quarter earnings Thursday. Analyst estimates call for earnings of $3.12 per share on sales of $57.1 billion.

Higher Minimum Wage 'Squarely In Focus'

Amazon’s growth in advertising, Amazon Web Services and third-party sales will be focal points of the report, D.A. Davidson analyst Tom Forte said in a preview note. (See his track record here.)

The analyst expects 27.4-percent sales growth, amounting to $55.74 billion, as sales have topped the consensus forecast in 11 of the past 14 quarters.

Forte anticipates a GAAP operating income of $2.1 billion, as well as an earnings per share of $3.38.

Amazon Web Services sales should increase by 44 percent, he said.

Investors will likely pay close attention to Amazon's new $15 minimum wage, Forte said.

“While we see it as an increasingly necessary move for Amazon to attract talent, expand its physical footprint, and make a statement, the financial impact will be squarely in focus this quarter.”

Forte reiterated a Buy rating on Amazon with a $2,450 price target

Market Research

Amazon’s worldwide e-commerce revenue is expected to increase by more than 28 percent this year to reach $394.23 billion, according to eMarketer data. The company’s domestic e-commerce revenue should grow over 29 percent to $258.22 billion.

Amazon's global net digital ad revenue is expected to surge 143 percent to reach $5.83 billion, giving Amazon a 2.1-percent share of the market on a global scale, eMarketer said.

Other notable statistics from the research include:

  • Worldwide mobile ad revenue growth of 235 percent.
  • 88.7 million U.S. viewers of Amazon Prime Video.
  • 40.7 million U.S. Amazon Echo owners.

Amazon's stock traded around $1,737.94 Wednesday afternoon. Shares are up 46 percent year-to-date.

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Amazon Threat Turns JPMorgan Bearish On Valvoline

Photo courtesy of Amazon.

Latest Ratings for AMZN

DateFirmActionFromTo
Oct 2019MaintainsBuy
Sep 2019MaintainsOverweight
Sep 2019MaintainsOutperform

View More Analyst Ratings for AMZN
View the Latest Analyst Ratings

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