More Videos
- 3D's Tipping Point and Your Living Room
- Silicon Valley and Hollywood Now Fast Friends
- HP Comes in As Expected; Is It Time to Buy?
- Apple Comes to AT&T's Rescue
- My Top 10 Tech Toys for the Holidays
- iPhone a Better Gaming Platform Than Android?
- Dell Has Some Explaining to Do
- Dell May Start to Show Some Promise
- Has Twitter's Finest Hours (Seconds) Come and Gone?
- Intel's Andy Bryant Offers An Explanation
MOST SHARED
- Tiger Woods Out of Hospital After Accident
- The Good Entrepreneur Winner
- Get Paid Six Figures to Wear a T-Shirt?
- Global Selloff From Dubai Woes Shows Signs of Winding Down
- Halftime Report: Dubai - First Ripple Of Larger Crisis?
- Longer Lines, Fuller Carts This Black Friday
- Dubai Spooks Investors But May Bring Buying Opportunity
- Next Week: Cash In Now Or Wait For A Santa Rally?
- Commodities Hammered as Investors Flee to US Dollars
- U.S. Stocks Fall on Dubai Worries
- Black Friday at Best Buy
- Strategists on Dubai: Avoid 'Rash Moves' Now
- Longer Lines, Fuller Carts This Black Friday
- Dubai Stock Market Fear Has 'Legs': Dennis Gartman
- Obama's Emission Reduction Pledge Paints Future for Autos
- Is Super Bowl Halftime Act Too Old?
- Surprising Options Trades in TiVo Shares
- EA Sports Hopes to Pump Up Sales Through Pop-Up Locations
- Global Selloff From Dubai Shows Signs of Winding Down
- Dubai Stock Selloff May Bring Buying Opportunity
- Longer Lines, Fuller Carts This Black Friday
- Tiger Woods Out of Hospital After Accident
- Dubai Fallout Is a Correction, Not Another Crisis: El-Erian
- Dubai's Debt Woes Signal New Era for Creditors
- Get Paid Six Figures to Wear a T-Shirt?
- The World's Biggest Debtor Nations
- Five Tips for Buying a Foreclosed Home
RSS FEED
Tech Check
Text Size 
Amazon [AMZN
Loading...
()
] has already tipped its hand a bit when it comes to earnings by calling this past holiday shopping season its "best ever, and now the question remains, is that good enough to beat the Street's expectations, and raise guidance from here forward?
Amazon will release its fourth quarter earnings after the bell Thursday, with analysts expecting 39 cents a share on $6.44 billion in revenue. ComScore reports that online retail sales dropped 3 percent to $25.54 billion from Nov. 1 to Dec. 23, and 4 percent through the entire fourth quarter. But Amazon itself says orders jumped 17 percent to more than 6.3 million items on Dec. 15, its single busiest day. The company has already forecast a fourth quarter revenue range of $6 billion to $7 billion.
The company's news will follow disappointing earnings from eBay last week, but stronger than expected results from both Google [GOOG
Loading...
()
] and Yahoo[YHOO
Loading...
()
] . With better than 50 percent of eBay's [EBAY
Loading...
()
] sales now coming from fixed-priced transactions (clicking the company's Buy It Now feature rather than going through an auction), the thinking on Wall Street is that eBay is struggling to compete with the Amazon model, rather than watching Amazon emphasize auctions to try to compete with the eBay model.
So now the two are locked in a pitched battle for online retailing dominance and it looks as though Amazon is enjoying the upper hand, at least so far. Citigroup's Mark Mahaney predicts a miss-and-lower Q4 report despite suggestions of strength during the quarter. Based on his checks, he says, there's a reasonable downside risk to Street estimates. Sales might be climbing, he says, but at what cost? Free shipping? Severe discounting? He says there's a strong likelihood that Amazon's gross margins and net income will feel the pressure.
Piper's Gene Munster cites "consumer spending headwinds" that will continue to pressure growth and margins, rating the stock a "neutral" with a $45 target. Jefferies' Youssef Squali echoes the concerns, with limited visibility into margin expansion because of the steep discounting.
Citi's Mark Mahaney offers up a very useful "cheat sheet," and here are some highlights: Pro forma operating income expected to be about $330 million, though anything less than $300 million would be negative; operating margin of about 5.1 percent (Citi expects 4.7 percent); North American revenue growth of 13 percent, better than 15 percent good, but under 12 percent bad; North American gross margin of 22.3 percent; International revenue growth of 6 percent; International gross margin of 18.5 percent; and a Third Party mix percentage of 25 percent to 30 percent.
As far as guidance is concerned, the Street is looking for operating income of $261 million on $4.598 billion and for the entire year 2009, operating income of $1.2 billion on $21.3 billion.
Analysts will also be looking for some commentary on the company's Kindle electronic book reader. The company sorely underestimated the popularity of the device heading into the holiday shopping season, announcing a 3 to 4 month back-order delay after Oprah Winfrey featured the Kindle, and Amazon CEO Jeff Bezos, on her show, calling it the best device she's ever seen. As Amazon seeks to replenish the supply chain with the $399 device, there's rumors that the company will upgrade and update the device with a newer version as soon as next month, and that part of the product shortfall came from Amazon trying to clear the channel. It's just that the channel cleared a lot sooner than anyone anticipated.
Amazon has scheduled a significant media event in New York City on February 9 and there's speculation that it might center on the new and improved Kindle.
Meantime, Amazon shares dropped 30 percent during the quarter and 45 percent during 2008.
Questions? Comments?
Data is a real-time snapshot *Data is delayed at least 15 minutes