Amazon.com, Inc.(NASDAQ:AMZN) Showing Range Bound Trading Post Earnings Rally
Shares of Amazon.com, Inc.(NASDAQ:AMZN) have been consolidating over the past couple of weeks following a single day gain of about 17% after the company reported mush stronger than anticipated first quarter earnings. Shares of AMZN climbed 15.75% on April 26, 2012 and recently made a high of $233.84. The stock has corrected about 5.50% from its recent peak as the broader markets slumped in Europe fears.
For the first quarter, the company posted net income of $130 million, or 28 cents per share, down from a year ago profit of $201 million, or 44 cents per share a year ago, but may not be comparable to an estimated 6 cents by average analysts. Revenue during the latest quarter stood at $13.18 billion, an increase of 34% year-over-year, again ahead of street’s estimate by $0.27 billion. The online commerce giant said its Kindle Fire tablet computer was its best-selling item and helped lift revenue from digital movies and books.
For the current quarter, the company projects to generate revenue within a range of $11.9 billion to $13.3 billion, which is below the average $12.85 billion estimate. Operating income in this current quarter is expected to fall from 80% to 229%, year over year, to a range of $40 million to a $260 million loss, compared to analysts forecast of $267.5 million, a 30% decline, or $152 million on a GAAP basis.
Following the earnings report, analyst at Bank of America Merrill Lynch upgraded the stock to buy from neutral. However, yesterday, Morgan Stanley analyst Scott Devitt today maintained his Equal Weight rating on Amazon. Devitt wrote that many on the Street are too optimistic about the company’s margins, and the deterioration of key operating metrics will also weigh on Amazon. The firm cited: We remain cautious on Amazon.com shares as we believe revenue / unit volume is beginning to decelerate (ex-tsunami comps) as operating margin sits at the lowest level since Amazon.com first turned a sustained profit in CQ4:01.”
Shares of AMZN are down 0.30% to $223.14.