Could This Company Be The Next Amazon?

Amazon Q4 Earnings: What Should Investors Expect?

The world’s largest online marketplace and cloud services provider is set to report earnings next week so what can investors expect?

In the last quarter (Q3 2021), Amazon’s (NASDAQ: AMZN) profits fell by over 50% year-over-year (YoY) due to pandemic-related issues that raised operational costs for the company. CEO Andy Jassy said that the same can be expected during the vital holiday season in Q4. Profits weren’t the only misfire as analyst-projected revenues were missed for the second quarter in a row. 

In the last five years, Amazon’s stock price has increased by over 240% but in this year alone, it’s down by nearly 19%. Investors will be keen to see if the $1.5 trillion company finally resumes hitting projected revenues and if it turns the corner profit-wise when it reports earnings next week for the quarter ended December 2021. 

When is Amazon’s earnings date?

Amazon reports earnings for the fourth quarter of 2021 on Thursday, February 3rd, at 5:30 pm Eastern Time. 

How can I listen to Amazon’s earnings call?

To listen to the call and to access the transcript, as well as the shareholder’s letter and the financial statements for the quarter, all you need to do is go to Amazon’s Investor Relations Page

What to expect from Amazon’s earnings

Wall Street Analysts that are tracking Amazon expect the company to post earnings of $3.88 per share on revenue of $137.7 billion. This represents a decrease of 72% and a 10% increase, respectively, YoY. The metric investors will be listening for is operating income which the company projects to be between break-even ($0) and $3 billion, a 100% to 56% decrease, YoY. 

Amazon has aggressively maintained capacity during the pandemic by increasing its staff to nearly 1.5 million employees. With an average starting pay of $18 per hour, sign-on bonuses, and pay raises for additional shifts, the company’s operational costs took a hit. Additionally, supply shortages, supply chain problems, and increased freight and shipping rates continue to raise expenditures for the company.

Investors will be listening for details on Amazon Web Services (AWS) revenue, which will likely be the company’s highest ever, as it has continued to rise every quarter for the last eight years. In fact, it is slowly encroaching on consumer retail sales as the highest revenue earner for the company. 

It seems like the segment basically keeps every customer it acquires for life due to the demandingly difficult resources and costs associated with switching platforms. And this is great news for investors as the division represents a consistent, predictable revenue stream that will continue to grow. 

The big-ticket item on the call will be the holiday numbers and whether or not pandemic-inspired e-commerce spending is here to stay. With e-commerce spending up 13.5% last month (according to Mastercard SpendingPulse), the earnings report might still surprise.

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