Anemic Amazon: Wall Street Tires Of Jeff Bezos' Aversion To Profit
Amazon.com continues to be a sales machine, but when is it going to turn real profits?
In what initially seemed like a gangbuster first quarter earnings report, Amazon showed nearly $20 billion in revenue, beating the analyst consensus estimate as sales rose 23% from last year. The company also eked out a small net income improvement - to $108 million from $82 million.
But Amazon's guidance scared investors. While net sales are expected to grow between 15% and 26% compared to 2013, Amazon admitted they expect a return to the red - with an estimated operating loss between $455 million and 55 million. In last year's second quarter, the company posted a small $79 million operating income.
Amazon has long traded at a massive multiple of its near-nonexistent earnings, but Wall Street appears to be getting tired of billionaire founder and CEO Jeff Bezos' aversion to profits. Analysts everywhere lowered their price estimates for Amazon on Friday, including Bank of America-Merrill Lynch, J.P. Morgan, RBC, Deutsche Bank, Wells Fargo, SunTrust, and Citi.
Investors seem to agree. After the stock tipped up in after hours trading on Thursday, Amazon shares opened down on Friday morning and stayed that way. As of 11:10am EDT, shares were down nearly 10%.
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