Top online retailer Amazon.com (AMZN) posted 2nd quarter earnings results after the bell Tuesday. Amazon brought in earnings of 41 cents per share on revenues of $9.91 billion in the quarter. This beat expectations on both the top and bottom lines — the Zacks Consensus Estimates were for 37 cents per share on revenues of $9.37 billion.
This is a welcome development for investors in AMZN following a disappointing 1Q earnings report, in which the company reported a 27% negative earnings surprise. Infrastructure spending and exposure to Japan’s crisis had hampered results in that quarter.
Amazon now says Kindle demand has improved, which helped lead to the solid earnings beat. The $9.91 billion in revenues represents a 51% increase year over year.
Operating income fell 26% to $201 million, but operating margin managed to reach 2% in the quarter. It is the operating margin that is a closely-watched metric for analysts of Amazon, and the result has fallen squarely within the expected 1-2.5% range.
Amazon’s guidance for the 3rd quarter is for revenues between $10.3 and $11.1 billion. This is a higher estimate on the top end than the current consensus indicates. The Zacks Consensus Estimate for 3Q is currently 49 cents per share, and $2.43 for fiscal 2011.
Analysts had made few revisions over the past month, but immediately after Amazon’s earnings miss in the March quarter was posted, a flurry of downward revisions lowered expectations. Thus today’s beat was a relatively easy bar to surpass.
That said, it now looks as if Amazon has regained some of its lost momentum. The stock, which was up 69 cents to $214.18 in regular-day trading, is up more than 6% in the after-market thus far.
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