Amazon's earnings will show whether e-commerce can keep its pandemic surge going

Published Thu, Jul 29 202110:01 AM EDTUpdated Thu, Jul 29 202111:17 AM EDT

Amazon is slated to report second-quarter earnings Thursday, and the results could give investors an idea of whether e-commerce momentum will slow as pandemic restrictions ease. Amazon's second-quarter results are expected to get a lift from Prime Day, which took place from June 21-22 , one month earlier than its usual July slot. The company doesn't release sales figures from the two-day discount event, but analysts estimated the results were either in line with their expectations or slightly softer than years' past. Even if Prime Day sales grew slower than last year, most investors still expect Amazon to report a strong second quarter. Analysts surveyed by StreetAccount project Amazon to haul in sales of $115.4 billion during the quarter, an increase of 29.8% year over year. Amazon guided for second-quarter revenue to be between $110 billion and $116 billion. Here are four other things investors will be watching for in Amazon's earnings report: 1. Q3 caution The key figure for investors watching for a post-pandemic slowdown will be Amazon's third-quarter outlook. There's some uncertainty that the pandemic-fueled e-commerce momentum could cool off as the economy reopens and consumers spend more on travel and services. But a rise in highly contagious Covid-19 delta variant cases could push consumers to shift more of their shopping back online as a precautionary measure, which would benefit Amazon and other digital retailers. Analysts have also highlighted that Amazon stands to benefit from a robust back-to-school shopping season and the expanded child tax credit . "If anything, a slight moderation in growth this quarter will help to recalibrate expectations for the next few periods," UBS analysts wrote in a note to clients. "The important point is this print will serve as a healthy reminder that AMZN has a dominant position in a secular trend that will continue for some time." 2. New CEO Amazon executive chairman Jeff Bezos handed over the CEO role to Andy Jassy on July 5 , in one of the most closely watched executive transitions in recent history. Investors will be looking to see if Jassy, who previously led Amazon's cloud-computing division, offers any insight into his strategic plans or top priorities for the company moving forward. Jassy could address investors directly on Amazon's quarterly earnings call Thursday evening. But if his predecessor's choices are any guide, that's unlikely. The last time Bezos appeared on an earnings call was April 2009 . 3. One-day delivery Chief financial officer Brian Olsavsky said on the company's earnings call last quarter that Amazon was working hard to get its one-day shipment percentages back up to pre-pandemic levels. Amazon's fulfillment and logistics operations were heavily disrupted when the Covid-19 pandemic caused a surge in online ordering, resulting in longer delivery times and bottlenecks in the company's warehouses. Within the last year, however, Amazon has expanded its physical footprint at a rapid clip, giving it more capacity to handle orders. That's led to one- and same-day shipping to return to normal levels in some areas, Amazon executives previously said. 4. MGM Amazon announced May 26 it's buying MGM Studios for $8.45 billion, representing the second-largest acquisition in its history. The Federal Trade Commission is reportedly investigating the acquisition. Investors will be watching for any commentary from Amazon around the regulatory scrutiny, as well as any color on its content plans. The company revealed in its latest annual report that it spent $11 billion on content for its streaming video and music services last year. Its content budget could swell further if the MGM deal gets the greenlight, giving Amazon the opportunity to mine the studio's archives for future spinoffs and remakes. The Hollywood studio owns a vast catalog of titles, including the James Bond franchise, and hit TV shows like "The Handmaid's Tale" and "Fargo."

Andy Jassy, CEO of Amazon Web Services, speaks at the 2019 CERAWeek by IHS Markit conference in Houston, Texas, on March 11, 2019.

Aaron M. Sprecher | Bloomberg | Getty Images

Amazon is slated to report second-quarter earnings Thursday, and the results could give investors an idea of whether e-commerce momentum will slow as pandemic restrictions ease.