Amazon Crashes After Missing Top And Bottom Line, Guides Lower

Amazon Crashes After Missing Top And Bottom Line, Guides Lower

Did the Amazon bubble just pop? Unless Jeff Bezos announces he is working on a space station that just may be the case, because while the company missed both the top and bottom line, and guided lower  – traditionally a perfect trifecta to send the stock soaring afterhours – the stock is plunging some 10% after hours, even if it now has a true bargain-basement LTM PE of 672x.

Specifically the Q4 results were as follows:

  • Revenue of $25.59 billion, missing expectations of $26.0 billion
  • EPS of $0.51, missing expectations of $0.69, and this despite using a far lower tax rate (39.7%), than used a year ago (57.6%)
  • Guides Q1 revenue of $18.2 – $19.9 billion, on the low end of the consensus estimate of $19.69 billion
  • Guides Q1 Operating Income of ($200)-$200 on expectations of $367.8 million.

Some other observations:

  • Worldwide net sales rose 22%: the lowest in year (see chart below), below the 26% in Q3 and below the 23% a year ago
  • Total employees rose to 117,300 (!), from 109,800 a quarter ago, and 91,300 a year ago.

Ironically it wasn’t all bad, as Operating Income rose to $510 million, above the $490 million expected, and the highest single quarterly Operating Income in over 4 years. This was matched by Net Income of $239 million – the highest since December $416. Perhaps AMZN should have just continued losing money and burning cash, and all would have been well.

Unfortunately, those looking for a margin rebound will have to wait: at 1.0% LTM Operating Margin it has gone exactly nowhere since September 2012 and much lower compared to previous year. This happened even though Q4 operating margin bounced to 2% – the highest since June 2011, driven by the holiday spending season.

Putting it all together and you get something very troubling: the stock, which historically woudl have soared on news as bad as these, is plunging, and was down 10% at last check. 

Did the Jeff Bezos “myth” bubble finally pop?

Your rating: None Average: 4.8 (4 votes)

Share This:
free vectors