Wall Street Cranks Up Its Outlook for Amazon After It Delivers Monster …

24 Jul 2015 | Author: | No comments yet »

Amazon is Now Bigger than Wal-Mart.

After the market closed yesterday, Amazon.com Inc. reported a surprise second-quarter profit, with sales that blew past analyst estimates. Amazon has overtaken Walmart to become the highest-valued retailer on the stock market after the company delivered better-than-expected quarterly results.Which, according to calculations by the business news outlet Forbes, makes him the world’s fifth richest person, worth more than $US50 billion ($68 billion).

Amazon shares surged more than 17 per cent on Thursday as the online retailer posted an unexpected quarterly profit, pushing its market value above that of Wal-Mart Stores, the world’s largest retailer.A testament to the strength of e-commerce, Amazon (AMZN) now has a greater market value than retail behemoth Wal-Mart (WMT), with about $266 billion compared to $236 billion. Combined with a bullish forecast for the third quarter, upbeat comments from company executives on Amazon’s Prime delivery service and rapid growth in its cloud computing service, Amazon delivered the kind of results Wall Street is looking for. Amazon saw its shares tick up 17% in extended-hours trading after surprising Wall Street with a profit in its second quarter earnings reporton Thursday. That pushed Amazon’s market capitalisation, or the value of all its shares added together, above $250 billion, while Walmart closed at $230 billion.

Analysts had been forecasting a loss of 14 cents per share, but the company blew past expectations, posting a profit of 19 cents per share, or $92 million. In the US and elsewhere, its a full-fledged online retail giant that’s expanded into everything from smartphones to streaming television, and wants to pioneer home delivery by drones. As of last week Friday, analysts surveyed by Bloomberg had an average price target of $480 with 32 analysts rating the firm a buy, 16 hold and 1 sell. Prime, which for USUS99 a year also provides exclusive access to certain movies, music and Kindle books, is getting new subscribers at rates “higher than we’ve ever seen,” chief financial officer Brian Olsavsky told analysts on a conference call.

Membership was growing faster outside the United States than inside, helped in part by a recent one-day sale event called “Prime Day,” Amazon said. One of its biggest drivers of revenue growth was its cloud services business, which has corporate clients including Netflix (NFLX), Pinterest and Expedia (EXPE).

He went on to list the company’s achievements – everything from Prime Day on July 15, which broke its previous Black Friday sales record, ton debuting six new kids pilots. It declined to disclose membership figures. “Growth has been fuelled in large part by Prime growth and also (item) selection growth so it’s been a huge driver both in North America and international segments,” Olsavsky said in a separate call for reporters. AMZN reported a break-out qtr with revs beating the high-end of guidance and 2% above our est. driven by accelerating EGM and AWS topline growth, while margins shined with GM’s 90bps and adj. op inc. 200bps above forecast. 3Q15 revenue and adj. op. inc. crushed our and street pre-print estimates. Amazon’s bottom line got a boost from better-than-expected revenue, which surged 20 percent, to $23.2 billion, as Web shoppers grabbed more electronics and general merchandise, the company said. It’s “very difficult to poke holes anywhere in the story,” said James Cakmak, analyst at Monness Crespi Hardt. “Their fastest components of growth are also their highest margin categories,” he added, referring to both the web services business and also its growing e-commerce revenue from third party-sellers.

A key bright spot was the company’s cloud-computing division, Amazon Web Services, whose revenue surged to $1.82 billion, up from $1 billion a year earlier. Revenue rose 19.9 per cent to USUS23.19 billion. “It looks like they beat across every major revenue line,” said Colin Sebastian, analyst with Robert W. The company’s CFO Thomas Szkutak retired last month and was succeeded by Brian Olsavsky, who served as a vice president of finance for the global consumer business. America EGM rev. into the holidays; 2) AWS [Amazon Web Services…cloud computing] revenue strength to drive potentially higher multiples; 3) potential margin upside from AWS, 3P mix and fulfillment efficiency.

Consistent with last quarter, operating income guidance for 3Q15 indicated a strong top line and margin expansion for AWS in addition to positive expectations for Prime Day. Amazon declined to comment on rising competition from new online retailers like Jet.com, which offers annual memberships at half the price of Amazon Prime and promises savings on 10 million products. Not only can you dress like Trump – with him having a menswear licensing deal which earned him up to $5 million in 2014 – you can also sleep like the man.

We still see room for more upside from cross-border trades (CBT) into China and opportunities for the advertising business for small/medium businesses (SMBs). Serta’s website says: “Trump is a name synonymous with the upscale lifestyle, superior quality and success of Donald Trump and his world-renowned empire.

We think Amazon is well positioned for share gains with the best customer experience in retail (lowest prices, best selection, best service) and substantial structural cost advantages. ..we believe AMZN will continue to reap margin benefits from fulfillment center maturation and shipping fee savings from its expanded footprint we reiterate that while investor focus continues to center on AWS reacceleration and strength in EGM, we would instead refocus on Amazon’s expanding core retail gross profit on the ongoing benefits of FC maturation and growth of Prime membership. We believe this quarter is further evidence that Amazon’s investment in infrastructure, logistics, and web services is accelerating market share gains, cash flow growth, and continued high returns on invested capital. Only three delivered the author a royalties check, with Think Like a Champion, The Art of the Dea and Time to Get Tough, earning their spot on the bookshelf. Upgrade to OW: We normally shy away from ratings changes on quarters as we tend to wait for the stock to settle after a big move and then re-evaluate. This quarter was too good in our view to wait and, despite the sizable move in the stock already this year (and aftermarket), we now believe there is even more upside.

A Bloomberg assessment found Trump’s largest assets, including the commercial spaces at Trump Tower on Fifth Avenue in New York, the leaseholds to 40 Wall Street and Manhattan’s Niketown, a partnership with Vornado Realty Trust in two office buildings, and his collection of golf courses and resorts, to be worth at least $US2.4 billion. Donald Trump can count himself amongst the legion of Australian mum and dad shareholders who closely follow the fortunes of blue chip telco giant Telstra. Trump’s company ACN paid him $US450,000 in revenue from speaking engagements, while he charged three other specific retail organisations as much as $US100,00 for speeches. A company called The Trump Entrepreneur Initiative, which says its underlying assets are a “seminar program” had revenue of just $US11,819 since the beginning of 2014.

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