Andy Jassy, chief executive officer of Amazon.Com Inc., during the GeekWire Summit in Seattle, Washington, US, on Tuesday, October 5, 2021.
David Ryder | Bloomberg | beautiful pictures
Shares of Amazon increased more than 10% on Friday, the day after the company posted second-quarter revenue was higher than expected and offered upbeat guidance.
Sales for the three months ended June rose 7% to $121.23 billion, higher than Wall Street’s $119.09 billion expected. It represents the third consecutive quarter of single-digit year-over-year revenue growth for Amazon.
Amazon’s Q3 forecast suggests growth could accelerate again, between 13% and 17%. The company said it expects revenue for the quarter between $125 billion and $130 billion, while analysts expect revenue of $126.4 billion, according to Refinitiv.
Amazon and Apple reported positive results in a dismal earnings season for tech companies. Facebook parents Meta, Alphabet and Microsoft All reported disappointing results for the quarter, as decade-high inflation, rising interest rates and other macroeconomic pressures weighed on their businesses.
Wall Street cheers Amazon earnings report, with one analyst call the e-commerce giant is “a berth in a macro storm,” as it so far appears to be weathering multiple headwinds challenging its tech peers.
Deutsche Bank analysts led by Lee Horowitz wrote in a note to clients on Friday: “All in all, Amazon provided investors with a very clear Q2 earnings, amid extreme macro-related earnings volatility in the tech sector.” The company, which maintains a buy rating on Amazon stock, raised its price target to $175 from $155.
Some analysts say the results show Amazon is making progress on costs that have pressured the company in recent quarters. Amazon had to face high costs related to labour, supply chain, energy and transportation, as well as the Covid-19 pandemic, among other factors. CEO Andy Jassy said on Thursday the company continues to work through “controllable costs.”
“With the successful 2-day Prime Day event in July and mgmt [management] discussing end demand concerns in its core businesses, we see Amazon well positioned to report strong revenue growth in 2H’22 [the second half of 2022]”, analysts at Goldman Sachs, led by Eric Sheridan, said in a research note on Friday. The company maintained its buy rating on the stock.
CLOCK: Sundaram: Amazon is not recession-proof, but it is recession-proof
