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.

Related Articles
  1. Stock Analysis

    Analyzing Altria's Return on Equity (ROE) (MO)

    Learn about Altria Group's return on equity (ROE) and analyze net profit margin, asset turnover and financial leverage to determine what is causing its high ROE.
  2. Investing News

    Icahn's Bet on Cheniere Energy: Should You Follow?

    Investing legend Carl Icahn continues to lose money on Cheniere Energy, but he's increasing his stake. Should you follow his lead?
  3. Stock Analysis

    Analyzing Google's Return on Equity (ROE) (GOOGL)

    Learn about Alphabet's return on equity. How has its ROE changed over time, how does it compare to its peers and what factors are driving ROE for the company?
  4. Investing News

    Is Buffett's Bet on Oil Right for You? (XOM, PSX)

    Oil stocks are getting trounced, but Warren Buffett still likes one of them. Should you follow the leader?
  5. Investing News

    Chipotle Served with Criminal Probe

    Chipotle's beat muted expectations and got a clear bill from the CDC, but it now appears that an investigation into its E.coli breakout has expanded.
  6. Stock Analysis

    Analyzing Sprint Corp's Return on Equity (ROE) (S)

    Learn about Sprint's return on equity. Find out why its ROE is negative and how asset turnover and financial leverage impact ROE relative to Sprint's peers.
  7. Stock Analysis

    Why Alphabet is the Best of the 'FANGs' for 2016

    Alphabet just impressed the street, but is it the best FANG stock?
  8. Investing News

    A 2016 Outlook: What January 2009 Can Teach Us

    January 2009 and January 2016 were similar from an investment standpoint, but from a forward-looking perspective, they were very different.
  9. Mutual Funds & ETFs

    3 Vanguard Equity Fund Underperformers

    Discover three funds from Vanguard Group that consistently underperform their indexes. Learn how consistent most Vanguard low-fee funds are at matching their indexes.
  10. Investing News

    Alphabet Earnings Beat Expectations (GOOGL, AAPL)

    Alphabet's earnings crush analysts' expectations; now bigger than Apple?
RELATED FAQS
  1. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  4. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  5. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  6. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center