Amazon seen posting strong revenue growth as expenses surge
Amazon’s revenue in the first quarter is estimated to reach $49.9 billion, up 40% from a year earlier
Seattle/New York: Amazon.com Inc. is expected to post a sharp rise in sales when it reports first-quarter earnings on Thursday, but investors will be watching to see how much revenue it’s plowing back into its many businesses.
Revenue in the first quarter is estimated to reach $49.9 billion, up 40% from a year earlier, thanks in part to a big boost from last year’s acquisition of grocery chain Whole Foods. Analysts project earnings of $1.26 per share, down from $1.48 a year earlier, as Seattle-based Amazon keeps investing in international expansion, data centers for its cloud-computing division, new devices and original programming for video streaming.
Analysts at Stifel Financial Corp. anticipate sales beating estimates, given record consumer sentiment levels and an expanding Prime membership base. Bloomberg Intelligence analysts said Whole Foods’ introduction of free home delivery may lift sales, while demand for the Echo line of smart speakers could help cement Amazon’s market-share dominance.
Wall Street will also be watching for any commentary about the regulatory environment or the impact of potential postal rate hikes in the wake of US President Donald Trump’s tirades against the company.
Trump’s attacks on Amazon — he claimed the Postal Service undercharges the company for deliveries and that Amazon doesn’t pay its fair share in taxes — haven’t had much of an impact on the e-commerce giant’s business so far.
While the president’s comments knocked down the shares temporarily, they’re up 25% this year, compared with a decline of 1.3% in the Standard & Poor’s 500 Index. Amazon rose 1.9% to $1,489 in early trading in New York on Thursday. Bloomberg
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