Amazon (AMZN) reports Q2 earnings after the close. Please join us here for live analysis at 4PM ET.
Here’s a quick preview and “cheat sheet” from Mark Mahaney at Citi:
- We are looking for $4.57B in revenue, $254MM in pro forma operating income, and $0.28 in GAAP EPS vs. the Street at $4.67B, approximately $271MM, and $0.32, respectively. Based on intra-quarter channel checks, our model sensitivity work, our FX analysis, and our Macro read, we believe Street Q2 estimates are reasonable, although consistent with our June 21st report, we don’t see evidence of upside. The biggest swing variables, we believe, could be accelerated market share gains by Amazon, continued International outperformance, and the overall gross margin/pricing environment – which we believe could be less benign than in Q1, given likely less availability of distressed inventory in Q2. All in, we are calling for an In-Line Q2.
- Our AMZN fundamentals call for Q2 is negative. We anticipate that AMZN’s Q2 results will show deterioration, with a deceleration in FX-adjusted Y/Y revenue growth to 19% (vs. 25% in Q1 and 24% in Q4) on a somewhat tougher comp, and a pro-forma operating margin that could be down 40 bps Y/Y to 5.6%. We continue to believe that Q2 will be the trough fundamentals quarter for Amazon on a reported trends basis.
- Included In This Note Is Also Our AMZN Q2 “Cheat Sheet” – On page 3, we provide a one-page grid of what we would view as Positive, Neutral & Negative results for AMZN on Key Q2 P&L, Q2 Underlying Metrics, and Q3 Guidance.
Reiterate our Buy and $100 TP.
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