Will Amazon.com continue its quest for world domination with next Thursday’s Q4 results?
A very, very (very) minor wobble between late July and the end of October aside, 2017 was another stonking year for Amazon. Starting at an already heady $758 per share, the online monolith just kept climbing, with its ascent especially sharp following October’s third quarter report.
It finished the year at $1169, marking a 54% surge across 12 months, only to keep going as 2018 got underway. Amazon.com Inc (NASDAQ:AMZN) now sits at a current trading price, and all-time high, of $1359.25.
So, what was so special about those Q3 figures that it caused Amazon to jump 14% in reaction? Well, there wasn’t a duff number among them. Revenue, which rocketed 34% higher to hit $43.7 billion in part thanks to the addition of Whole Foods, beat estimates by more than $1.5 billion, at 52 cents per share net income was light years ahead of the meagre 3 cents forecast by analysts.
There was also a 41.9% increase in revenue to $4.58 billion at its cloud computing division Amazon Web Services, one of the most hotly-watched aspects of its business. This kind of growth helped investors ignore the company’s latest splurge, with Amazon’s operating profit dropping 40%, from $347 million to $575 million year-on-year, as it once again ramped up its spending.
In terms of Thursday’s fourth quarter results, Amazon itself stated it expects revenue growth of 28% to 38%, placing the actual figure somewhere between $56 billion and $60.5 billion. It gave a far wider – almost absurdly wide – target for operating income, which it forecasts will arrive anywhere between $300 million and $1.65 billion, compared to the $1.3 billion seen the year previous. Now it just needs to walk that precarious tightrope between investor expectation and satisfaction.
Amazon.com Inc has a consensus rating of ‘Buy’ alongside an average target price of $1291.44.
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