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Amazon Jumps And Dumps As AWS Growth Slows, Outlook Disappoints
Last quarter, when Amazon reported otherwise respectable earnings, the market hammered the stock after the company guided to the lowest revenue growth since 2001. And, as the company reported moments ago, while its guidance may have been slightly downbeat, it wasn't too far off as Amazon reported Q1 net sales of $59.7BN, just above the $59.68BN consensus estimate, while generating an impressive $7.09 in Q1 EPS, well above the $4.67 expected.
(when you shift the guidance throughout the qtr these result's are not surprising-They low-balled it for 1st qtr and Surprise! came close)
Here are the summary highlights:
EPS of $7.09, beating estimates of $4.67
Revenue of $59.7BN, in line with estimates of $59.68BN
Operating income of $4.42 billion, also beating consensus estimates of $3.10 billion
Amazon Web Services rose 42% to $7.70BN, Exp. $7.67BN; this compares to growth of 45% last quarter and 46% the quarter before.
The good news here is that whereas Q1 revenue did come in slightly better than expected, it still showed a significant slowdown, rising 17% in Q1, the slowest growth pace in 4 years. Looking ahead, the slowdown is expected to accelerate, as the company now expects Q2 net sales of $59.5BN to $63.5BN, with the midpoint of $61.5BN coming in below the Wall Street consensus estimate of $62.4BN. If revenue comes in right on the midpoint, it would represent another top-line slowdown of 16.3% in Q2.
That said, the company's profit margin nearly doubled, from 3.8% last year to an impressive 7.4% in Q1 2019, largely thanks to the increasing contribution from AWS.
(helps when you have C_A contracts doesn't it?)
On the other hand, Amazon's operating income outlook disappointed, with the company now expecting it to come in between $2.6 billion and $3.6 billion, compared with $3.0 billion in second quarter 2018, but well below the Wall Street consensus estimate of $4.2 billion.
One notable improvement was the sharp drop in the international loss, which shrank to just $90MM in Q1 2018, down sharply from the $622MM loss a year prior.
As noted above, the all important Amazon Web Services was once again responsible for more than half of Amazon's entire profit, with the division generating $7.7BN in revenue and $2.22BN in operating income, a 28.9% margin, down from the 29.3% in Q4, and responsible for 50.2% of Amazon's total operating income of $4.42BN. Slightly more concerning was the slowdown in AWS revenue, which rose 42%, down from 45% last quarter.
Meanwhile, Amazon's other revenue, which includes Amazon's advertising business, grew only 36%, a sharp drop from the 97% growth in Q4 and the 132% growth it had a year ago. One possible reason for the slowdown is that Kroger, Walmart, Target and other big retailers are building out their own in-house digital advertising businesses.
(also in anticipation of AMZN exiting China in June)
Looking at Amazon's Bricks and Mortar presence, the price cuts implemented by Whole Foods appear to have helped overall sales in the "physical stores'' segment, which rose 1% to $4.3 billion compared with the year-ago period, reversing a 3% decline in the fourth quarter.
The stock initially spiked on the big EPS beat, but has since retraced all gains as investors focused on the slowdown in AWS and the disappointing operating income guidance.
https://www.zerohedge.com/news/2019-04-25/amazon-jumps-and-dumps-aws-growth-slows-outlook-disappoints
over/under on him lasting moar than 4 month's?
Japan tells U.S. can't link monetary policy to trade, finance minister Aso says: Jiji
WASHINGTON (Reuters) - Japanese Finance Minister Taro Aso said on Thursday he told U.S. Treasury Secretary Steven Mnuchin that Tokyo cannot accept discussions that link monetary policy to trade issues, Jiji news agency reported.
Aso also said the two sides agreed that exchange-rate matters would be discussed between financial authorities, and that Tokyo and Washington should not talk about currency issues in the context of the trade debate, according to Jiji.
Aso and Mnuchin held a bilateral meeting in Washington ahead of a summit between Japanese Prime Minister Shinzo Abe and U.S. President Donald Trump later this week.
https://www.reuters.com/article/us-usa-trade-japan-idUSKCN1S12NS
https://www.secform4.com/insider-trading/1065280.htm
o7
whatever you say fuckface