Amazon.com Second Quarter Earnings

By Investopedia Staff | July 26, 2012 AAA

Amazon.com (Nasdaq:AMZN) announced its results for the most recent quarter on July 26, 2012. Amazon.com sells millions of products across dozens of product categories on its web site. It also manufactures and sells the Kindle, an e-reader.

In most situations, when earnings do not meet analyst estimates, a business' stock price will tend to drop. On the other hand, when actual earnings beat estimates by a significant amount, the share price will likely surge. SEE: Everything Investors Need To Know About Earnings

The Numbers: Amazon.com's EPS fell in line with analyst expectations of one cent per share. Revenue of $12.83 billion also met expectations. EPS fell 97.6% while revenue climbed 29.4% from the same period last year. Amazon.com has averaged revenue growth of 38.5% over the past five quarters. Amazon.com reported profit of $7 million during the second quarter. According to the reported number, this is down 96.3% from last year's figures.

Management Quote: "Amazon Prime is now the best bargain in the history of shopping - that is not hyperbole," said Jeff Bezos, founder and CEO of Amazon.com. "We successfully launched Prime seven years ago with free unlimited two-day shipping on one million items. The price of annual membership was $79."

A Look Back: Net income has dropped 53.9% year-over-year on average across the last five quarters. Performance was hurt by a 96.3% decline in the most recent quarter from the year-earlier quarter.

Looking Ahead: Over the past 90 days, the average estimate for the third quarter has fallen from 24 cents per share to 12 cents, indicating that analysts are growing pessisimistic about the company's performance next quarter. A decreasing earning estimate is a negative sign and usually leads to a drop in the stock price. The average estimate for the fiscal year is $1.21 per share, down from $1.36 90 days ago.

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