Can See The Ghost Of Christmas Past? (AMZN)

October 22, 2008 by Douglas A. McIntyre

Amazon_logoOnline retail giant Inc. (NASDAQ: AMZN) is set to report earnings after today’s close.  Despite the fact that is now a fully profitable industry leader is probably not going to be enough for CEO Jeff Bezos to come out with his "Bezos Laugh" all over the media outlets.  The company is not going to lose its leadership position any time soon, but it is also impossible to believe that the current economic woes aren’t being seen by the company.

First Call has estimates at $0.25 EPS and $4.27 billion in revenues forthis last quarter’s report today.  These estimates have come down sinceits last earnings report, but not as much as has been seen elsewhere.Estimates for next quarter are $0.55 EPS and $7.05 billion, and that isthe all-important Christmas quarter which is expected to account forand 37% of this year’s earnings 36% of this year’s revenues.

When the company last reported earnings, it gave guidance of $4.2 to$4.425 billion in revenue, and consensus estimates at that time were$4.23 billion.  It put operating income at $115 to $160 million afterGAAP items. 

Last quarter the share price was $70.54 going into earnings andactually traded north of $74.00 after the report.  Shares today areunder $52.00.  Options traders are braced for what looks like a move ofnearly $6.00 in either direction, but we would also note that with amonth to expiration there is a ton of time value in that figure.

Analysts still have a price target north of $73.00 and the 52-weektrading range is $43.39 to $101.09.  The short interest at theSeptember 30 cut-off date was also the lowest we have seen in the lastyear at 24.55 million shares.

Jon C. Ogg
October 22, 2008