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Amazon.com Inc. is expected to post strong revenue growth from the holidays when it reports fourth-quarter results after the market closes Tuesday, though profit margins will likely be squeezed by investments in the company’s distribution network.On average, analysts polled by FactSet are expecting earnings of 28 cents per share on revenue of $22.26 billion, according to a poll by FactSet. In October, Amazon forecast revenue of $20.25 billion to $22.75 billion for the quarter.
BGC Financial analyst Colin Gillis said “any upside” to Wall Street’s expectations “is still a very low hurdle given the difficulty the company has had expanding earnings in recent quarters.”
Overall, investors have been more than forgiving about Amazon’s thin margins on the premise that the company is investing in long-term growth. As of the stock market’s close on Monday Amazon’s stock was up about 10 per cent year-to-date.
Share rose slightly in premarket trading Tuesday, along with other tech stocks, after Yahoo topped Wall Street expectations late Monday for its first full quarter under CEO Marissa Mayer.
Amazon.com , based in Seattle, is the world’s largest online retailer. It also sells e-readers and tablet computers under the Kindle brand.
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