With Amazon and Google, together representing a whopping $3.1 trillion in market cap almost as large as the entire Russell 2000, set to report earnings after the close Bloomberg noted that some investors were nervous that anything but a massive beat, well in excess of expectations would be required to avoid a dip in the Nasdaq (recall last week’s drop in AAPL and TSLA stock following stellar earnings reports).
So what is the absolute lowest numbers that Amazon has to beat in Q4 to avoid sliding? Here are the consensus estimates:
- Net sales: $119.70 billion
- GAAP EPS: $7.34
- AWS net sales: $12.77 billion
- Operating income: $4.47 billion
Amazon was expected to post a record year, its sales supercharged by the pandemic with the online retail giant among the main beneficiaries. The debate retail watchers are having now is the extent to which people are going to go back to physical stores when the virus recedes.
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So with all that in mind, how did Amazon do? Well, in light of the continued covid lockdowns, it will probably not be a surprise that it was another blockbuster quarter for the retailer which blew away consensus estimates:
- Q4 Net Sales $125.56B, beating estimates of $119.70B
- Q4 EPS $14.09, smashing estimates of $7.340, more than double the $6.47 year ago.
- Q4 Operating Income $6.9B, beating estimates of $4.47B, up 77% Y/Y
- Q4 AWS Net Sales $12.74B, just missing estimates of $12.77B, up 28% Y/Y
- Amazon Web Services net sales +28% vs. +34% y/y, estimate +28.3%
- Fulfillment expense $18.47 billion, estimate $18.52 billion
Looking ahead, the company’s guidance was also solid:
- Amazon Sees 1Q Net Sales $100.0B to $106.0B, Est. $95.72B
- Operating income Q1 expected between $3.0 billion and $6.5 billion, compared with $4.0 billion in first quarter 2020.
… but the real bombshell in today’s report is that CEO Jeff Bezos will step down as CEO and “transition” to the role of executive chair in Q3 2021, who after 27 years at the helm of the retailer he founder, is ending an era at Amazon.
Discussing his life plans after Amazon…
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