Amazon.com Far From Immune To Consumer Slowdown (AMZN)

Amazon.com Inc. (NASDAQ: AMZN) today posted earnings of $0.27 per share and $4.26 billion in revenue.  First Call had estimates were $0.25 EPS and $4.27 billion in revenue. When the company last reported earnings 90 days ago, it gave guidance of $4.2 billion to $4.425 billion in revenue.  But there are many more important issues rather than just what happened this last quarter.

Operating income was also lower than expectations and the company saw only 33% international market growth.

As far as guidance for the all-important Christmas quarterly earnings,the online retail giant sees earnings via operating income at $145 to$305 million and $6.0 to $7.0 billion in revenues.  Consensus estimatesfor next quarter are $0.55 EPS and $7.05 billion.  This range is nowwell under where Wall Street was expecting, so the company issignaling that it has no ambitions that it is immune from a weakconsumer.

We had noted that options traders were braced for what looks like amove of nearly $6.00 in either direction and that analysts had anaverage price target north of $73.00.

We would note that the short interest of 24.55 as of the last date forthis earnings report is the least amount seen over the last year, sothe reaction here might be more on an organic move rather than onforced short squeezes and the like.

Shares closed down 0.5% at $49.99 today and are trading sharply lowerat prices under $43.00 in the after-hours session and the 52-weektrading range is $43.39 to $101.09. 

Jon C. Ogg
October 22, 2008