Andy Jassy, CEO of Amazon and then CEO of Web Services at Amazon.com Inc., speaks at the Amazon Web Services (AWS) Summit in San Francisco, California, U.S., Wednesday, April 19, 2017.
David Paul Morris | Bloomberg | Getty Images
Amazon releases third-quarter results after Thursday’s bell.
Here’s what analysts expect:
- Earnings: 22 cents per share, according to Refinitiv estimates
- Revenue: $127.46 billion, according to Refinitiv estimates
- Amazon Web Services: $21.1 billion, according to StreetAccount estimates
- Advertising: $9.48 billion, according to StreetAccount estimates
Like the rest of Big Tech, Amazon has had a rough year when it comes to macroeconomic headwinds, soaring inflation and rising interest rates. Those challenges coincided with a slowdown in Amazon’s core retail business as consumers returned to shop in stores.
Under CEO Andy Jassy, who took over from founder Jeff Bezos in July 2021, Amazon has responded to rising spending by aggressively cutting costs across many divisions in recent months. It lost warehouse space, halted some experimental projects, closed its telehealth service and froze hiring for corporate roles in its retail business.
Still, analysts expect Amazon to report strong third-quarter results, thanks to easier comparisons to last year’s numbers and a potential boost in sales from its annual Prime Day discount event. , held in July.
Revenue growth is expected to reach 15%, marking a return to double-digit growth after three consecutive quarters of single-digit growth.
Another bright spot could be Amazon’s advertising unit, which has been more resilient than its peers, including Meta, Alphabet and Instantaneouswhose advertising businesses have been wiped out due to the economic environment and Apples iOS privacy changed last year.
On Tuesday, Alphabet missed third-quarter expectations and YouTube’s ad revenue fell for the first time since Google began reporting results for the streaming video unit. Facebook parent company Meta stumbled again on Wednesday, reporting disappointing results and weaker-than-expected guidance for the fourth quarter.
“Besides the allocation to TikTok, the budget shift to reduce funnel activity is the constant feedback point in our conversations with marketers this quarter,” said Rob Sanderson, managing director of Loop Capital who recommends buy Amazon stock, in a recent note to clients. “Amazon is lowest on the funnel.”
Wall Street will also pay close attention to Amazon’s fourth quarter forecast. The forecast could signal the demand Amazon expects to see during the holiday shopping season. Analysts are already bracing for a lackluster season, with online sales expected to grow just 2.5%, according to Adobe.
Earlier this month, Amazon held a 48-hour Prime Early Access sale, which was the first time it had held two major discount events in the same year. The event kicked off the holiday shopping season early and could help boost Amazon sales in the fourth quarter. Analysts polled by Refinitiv forecast fourth-quarter revenue of $155.15 billion.
Amazon shares have fallen 31% so far this year, while the S&P 500 index has fallen nearly 20% over the same period.
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