After providing a weaker-than-expected forecast for operating profit in the current quarter, Amazon struggled in early after-market trade, falling ~4%. The company cited tariffs and trade policies causing consumers to pull back on spending. The world’s largest online retailer still delivered some big numbers as it beat 1Q estimates, but it’s the outlook where markets are focusing:
- Sales increased 9% year-over-year to $US155.67 billion for the three months to March 31st, in line with Wall Street estimates.
- Earnings Per Share (EPS) jumped to $US1.59 from 0.98c a year earlier, beating analyst estimates of $1.37.
- Sales are projected to come in between $US159 and $164 billion for the quarter ending June, in line with analyst estimates of $161.4 billion.
- The company projected an operating profit of $US13-$17.5 billion, below analyst estimates of $17.8 billion.
Encouragingly, the e-commerce giant logged strong double-digit revenue gains in its AI-heavy cloud computing division and advertising services. Also, the stock rallied 3% into the result during Thursday’s trade, so an early pullback is not too scary. The Seattle-based company will need to tread carefully with any “blaming game” during its earnings call this morning, as President Trump has already shown he can be a tad sensitive to such messaging.
- We can see AMZN underperforming the likes of Microsoft and Meta through 2025 as consumers wait to see the likely impact of tariffs.
MM is cautiously bullish on AMZN
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