Ahead of the Bell: Amazon.com

NEW YORK - Amazon.com inc. is set to release its third-quarter report after the market closes Wednesday and is expected to give some clarity on how the online retailer is weathering the economic downturn and what it expects for the holiday season.

Analysts and investors will be paying attention to these issues especially in light of fellow sector heavyweight eBay Inc.'s report last week. The online auction site operator issued a lower-than-expected fourth-quarter forecast, indicating it is not immune to economic sluggishness.

In July, Amazon predicted third-quarter revenue between $4.20 billion and $4.43 billion; analysts polled by Thomson Reuters, on average, expect $4.27 billion in revenue.

In a recent client note, Bernstein Research analyst Jeffrey Lindsay said that Amazon investors are concerned about the retailer's third quarter, given the general e-commerce slowdown and evidence that the economy is impacting eBay.

However, he predicted their worries will "prove unwarranted" when Amazon reports its results.

Amazon has grown faster than overall e-commerce in the past few years, and it has continued to gain market share from others, he said.

"We have no reason to expect that trend to end during the current challenging economic environment," said Lindsay, who rates the stock "Outperform."

However, Lindsay does expect economic weakness will hurt Amazon for several quarters in 2009.

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