Yahoo News Amazon (AMZN) to Report Q2 Earnings: What's in the Offing?
Amazon AMZN is scheduled to report second-quarter 2023 results on Aug 3.
For the second quarter, Amazon expects revenues in the band of $127-$133 billion. Net sales are expected to grow 5-10% from the year-ago quarter’s reported figure.
The Zacks Consensus Estimate for net sales is pegged at $131.54 billion, indicating growth of 8.5% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for second-quarter earnings is pegged at 34 cents per share, significantly up from 10 cents reported in the year-ago quarter.
Amazon.com, Inc. Price and EPS Surprise
Amazon.com, Inc. price-eps-surprise | Amazon.com, Inc. Quote
Prime, Retail & Streaming Momentum to Note
Amazon’s robust distribution network and Prime program are expected to have aided its online retail business’ performance in the second quarter.
Prime benefits, including a strong loyalty system, customer-friendly offers, quick grocery delivery services and robust Prime Free One-Day and Prime Free Same-Day Delivery services, are expected to have continued driving Amazon’s customer momentum in the quarter under review.
The Zacks Consensus Estimate for online store sales is pegged at $52.73 billion, reflecting growth of 3.7% from the year-ago reported figure.
AMZN’s aggressive stance on the core retail industry, especially grocery retail, is expected to have benefited its quarterly performance.
Solid momentum across the company’s Fresh grocery stores across the United States is anticipated to have contributed well to AMZN’s grocery sales in the second quarter. A solid network of Whole Foods Store and Amazon Go stores might have driven the company’s physical store sales.
The consensus mark for the second quarter’s physical store sales stands at $4.9 billion, indicating growth of 4.5% from the figure reported in the year-ago quarter.
Amazon’s strengthening footprint in countries like India, Canada, the U.K. and Australia is expected to have bolstered its efforts in expanding its footprint in the global retail market.
This apart, strengthening relationships with third-party sellers on the back of strong solution offerings might have remained a positive. The consensus mark for sales generated by third-party sellers is pegged at $30.97 billion, reflecting growth of 13.1% from the figure reported in the prior-year quarter.
Coming to streaming services, solid momentum across Prime Video is expected to have remained a major tailwind in the soon-to-be-reported quarter. Expanding original content, regional content and the overall content portfolio on Prime Video are expected to have driven the Prime subscription in the to-be-reported quarter.
We expect retail perks associated with Prime, along with strength in Prime Video, are likely to have continued aiding Amazon’s subscription revenue growth in the quarter under review.
The Zacks Consensus Estimate for subscription service sales is pegged at $9.75 billion, reflecting growth of 11.8% from the year-ago reported figure.
AWS Portfolio Momentum to Consider
Amazon’s expanding Amazon Web Services (AWS) portfolio is expected to have benefited its second-quarter performance.
In the second quarter, AWS made its purpose-built security data lake, called Amazon Security Lake, generally available. The service aids in the simplification of compliance monitoring and security data management across hybrid and multi-cloud environments by centralizing an organization’s security data across AWS environments.
It introduced a new configuration for Amazon Aurora, namely Amazon Aurora I/O-Optimized, which provides improved price performance and predictable pricing for I/O-intensive applications.
It unveiled three new capabilities for its threat detection service called Amazon GuardDuty - GuardDuty EKS Runtime Monitoring, GuardDuty RDS Protection and GuardDuty Lambda Protection.
AWS also announced the general availability of its no-code service, called AppFabric.
We expect all these initiatives to have helped Amazon win customers. This, in turn, is expected to have boosted AWS’s second-quarter revenues, whose consensus mark stands at $21.49 billion, up 8.9% from the year-ago reported figure.
Smart Device Portfolio Strength
Amazon’s strengthening Echo devices family might have contributed well. It introduced the new Echo Pop, Echo Show 5, Echo Show 5 Kids and Echo Buds during the quarter under review.
Amazon’s expanding tablet offerings with the introduction of Fire Max 11 might have been a positive.
This apart, AMZN’s expanding smart security camera offerings as well as its strength in Blink are likely to have aided the results further. Strengthening Alexa features is likely to have driven Amazon in delivering a better user experience.
All the abovementioned factors are expected to have aided AMZN’s quarterly performance.
However, the impacts of rising inflationary pressure and unfavorable foreign currency fluctuations might get reflected in the upcoming results.
What Our Model Says
Our proven model predicts an earnings beat for Amazon this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here, as you see below.
Amazon has an Earnings ESP of +2.99%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
AMZN has a Zacks Rank #3 at present.
Stocks to Consider
Here are some stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings this season.
Itron ITRI has an Earnings ESP of +7.61% and sports a Zacks Rank #1 at present. You can see the complete list of today's Zacks #1 Rank stocks here.
Itron is scheduled to release second-quarter 2023 results on Aug 3. The Zacks Consensus Estimate for ITRI’s earnings is pegged at 31 cents per share, suggesting a jump from the prior-year quarter’s reported figure of 7 cents.
CACI International CACI has an Earnings ESP of +2.36% and a Zacks Rank #2.
CACI is set to report its fourth-quarter fiscal 2023 results on Aug 9. The Zacks Consensus Estimate for CACI’s earnings is pegged at $4.85 per share, suggesting growth of 6.8% from the prior-year quarter’s reported figure.
Docebo DCBO has an Earnings ESP of +6.67% and has a Zacks Rank #3 at present.
Docebo is set to report its second-quarter fiscal 2023 results on Aug 10. The Zacks Consensus Estimate for DCBO’s earnings is pegged at 8 cents per share. The company reported a loss of 5 cents per share in the year-ago quarter.
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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
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