Amazon (NASDAQ: AMZN) will report its earnings from the critical holiday shopping season tomorrow. Recent reports from its Big Tech brethren Apple and Google have helped add some much-needed stability to an intensely volatile market, and investors will be hoping for more of the same from the e-commerce giant on Thursday.
The company had to navigate a host of issues throughout Q4, with worker shortages and increased shipping prices likely to have played havoc with its bottom line. CEO Andy Jassy previously warned that profitability was likely to suffer throughout a typically lucrative quarter for the company. Investors will be hoping his warnings were overly conservative, but it looks likely that the company won't quite reach its typical holiday heights.
Amazon is set to report its fourth-quarter 2021 earnings at 5:30 PM EST on Thursday, February 3, 2022.
Amazon's earnings call will be webcast live by the company and can be accessed here. A full replay of the webcast will also be made available following the session. The call transcript, as well as the shareholder's letter and the financial statements for the quarter, will all be made available on the company's investor relations page.
Analysts are expecting Amazon to report earnings per share (EPS) of $3.89 on revenue of $137.9 billion, representing a decline of 72.4% and growth of 9.8% on the year-ago quarter respectively.
Despite expecting revenue estimates to come in at the high end of the company's guidance range, hitting these figures would represent a fourth consecutive quarter of topline growth slowing down. Strong numbers from last year's pandemic-related boom inevitably lead to difficult and unfavorable comparisons, but investors will still be seeking clarity on what Amazon plans to do to reverse this trend.
Headwinds from external factors such as global supply chain issues have impacted the profitability of Amazon's core retail businesses. As a result, pressure now falls on other operations such as the subscription services offered by the company. Speculation is rife across Wall Street that Amazon is set to raise the price of its Prime delivery and streaming service, particularly in the wake of Netflix's announcement of price hikes for its own streaming services. With over 200 million subscribers globally, this could be an extremely lucrative move for the firm.
Rumors have also begun to swirl of a potential stock split following Google's shock announcement of a 20-for-1 split in its own earnings call yesterday. Amazon is now the only remaining Big Tech company with a four-figure stock price now that Google has followed Apple and Tesla in greatly reducing its share cost. A stock split could pave the way for Amazon to potentially join the Dow Jones Industrial Average Index, which it is currently prohibited from due to its price-based weighting system.
Investors will be hoping for the continued success of the company's Web Services and advertising divisions. Last quarter represented the first time in Amazon's history that online and physical retail accounted for less than 50% of its total revenue, and much of this was down to the success of the two aforementioned sectors. Strong growth in these areas could help to offset any revenue-related issues weighing on the company's retail arm.
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