Tuesday, October 25, 2011

Amazon.com (AMZN) Blows Up After Hours.

I was marveling at the analysts' estimates ahead of Amazon.com's report - the company was projected to grow revenue by 45% but see EPS shrink by half.  I wondered at what point do profits matter more than revenue growth?  Well, it appears the revenue growth tonight was in line but profits missed big, so it's a question for another day.  The stock is down some 18% in after hours.

Revenue a tiny bit light at $10.9B vs $10.93B (it's a rounding error) but EPS missed huge - $0.14 v $0.24.

Operating margins a dismal 0.7% - this was over 3% a year ago.

Guidance for next quarter is all over the map - a huge gap of $16.45B-$18.65B revenue vs estimate of $18.2B.  Operating income (loss) is expected to be between $(200) million and $250 million.

You can see we are now testing the 200 day moving average in after hours.  Let's see how aggressive dip buyers are - I mean, what a value at well over 100x forward EPS.

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