Amazon Delivers, But Why a $2 Billion Buyback? (AMZN)
January 28, 2010 by Douglas A. McIntyreAmazon.com Inc. (NASDAQ: AMZN) has just reported earnings of $0.85 EPS and $9.52 billion in revenues. Thomson Reuters had estimates of $0.72 EPS and $9.04 billion. The company sees $6.45 billion to $7 billion in revenues for the coming quarter with operating income of $275 million to $365 million. We have estimates from Thomson Reuters of $6.36 billion in revenues.
The company also announced that it would repurchase up to $2 billion in stock. That is great for many companies, but not for companies with expensive shares. Repurchasing stock at this price almost seems silly other than if the company said it will only do that if shares go on sale (i.e. sell-off). Are we supposed to interpret that Amazon is going to buy its own stock rather than buy other niche online high-growth niche players?
Amazon shares closed up 2.6% at $126.03 today, but these shares are down 3.7% at $121.77 in the after-hours session.
Today’s numbers looked great, but you have to keep in mind that the stock was at $48.97 for a 2009 low. With a bias of sell-the-news, what else is there to expect when the expectations were already so high.
JON C. OGG
Take This Retirement Quiz To Get Matched With A Financial Advisor (Sponsored)
Take the quiz below to get matched with a financial advisor today.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the
advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Take the retirement quiz right here.