Amazon’s Earnings Results…Read Between The Lines

Amazon reported fourth-quarter earnings of $6.04 a share on revenue of $72.4 billion on Thursday afternoon vs analysts expectation of $5.65 a share on revenue of $71.88 billion. 

However, the stock sold off on Friday because Amazon guidance for the next quarter of $56 billion to $60 billion vs analysts expectations of $60.83. 

The lower guidance was due to increase in spending for 2019 like $5 billion for HQ2 , slowing growth in the US / oversees and challenges in India.

But one must read between the lines:

  • 3rd record breaking quarter of profits with $3 billion of profits for the quarter.
  • Hiring 5,000 people in the Nashville, Tenn., area for a new operations center.
  • Amazon Web Services, generated $7.43 billion in net sales, jumping 45% from the same period of 2017. It posted $2.2 billion in operating income — accounting for more than two-thirds of the entire company’s total operating income, and 61% higher than this time last year.

Source

  • Amazon’s advertising business growth year-over-year was of 95% on sales of $1.74 billion. Amazon reported more than $10 billion in revenue from the advertising and other services segment, more than double the roughly $4.65 billion reported in 2017.  For the first time ever, Facebook mentioned Amazon in their annual 10K filing regarding their rise in the ad business.

Source

So where is Amazon headed, lets go to the charts to find out?

The chart suggests more downside risk vs upside reward because price formed a double top, broke the up daily trend line, forming lower highs and lower lows and has to deal with two daily supply zones.

This post is my personal
opinion. I’m not a financial advisor, this isn’t financial advise. Do your own
research before making investment decisions.

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