Amazon.com, Inc. (NASDAQ:AMZN) is scheduled to report their Q1 2010 results after the market closes on April 22, 2010. Company management provided Q1 2010 guidance in the range of $6.45 billion to $7 billion, reflecting a strong outlook for 2010.
Q1 2010 revenue is expected to reach as much as $6.9 billion, anticipating further acceleration of the International Media segment, coupled with a 6% growth year-on-year basis in EGM and favorable foreign currency translation. OIBDA is expected to touch $570 million, with margins of the same expanding by nearly 20 bps on a year-on-year basis. EPS is expected to amount to $0.56 for Q1 2010, with free cash flow to the firm of $0.95.
Amazon.com, Inc. seeks to be the world''s most customer-centric company, where customers can find and discover anything they may want to buy online. The company lists unique items in categories such as books, music, DVDs, videos, consumer electronics, toys, camera and photo items, software, computer and video games, tools and hardware, lawn and patio items, kitchen products, and wireless products.
Amazon.com, Inc. posted Q4 2009 revenues amounting to $9.5 billion, which were significantly ahead of expectations and profitability surprised too. Revenue growth was higher in pretty much every segment when compared Q3 2009. Revenues from North America were up 36%, while International revenue was up 37% ex-fx and 48% in dollar terms. Revenue growth is mainly attributable to category expansion and market share gains, within the third party arena. Operating income increased by 75% compared to the same period last year to $476 million in Q4 2009, and EPS for the quarter came in at $0.86 , up from $0.52 in the year-ago quarter. Worldwide media sales were up 29% to reach $4.68 billion this quarter, worldwide EGM sales grew 60% to $4.61 billion and the company managed to finish the quarter with nearly 105 million active customers, which marks a 19% increase on a year-on-year basis.
Analysts' estimates for Q1 2010 range from a low of $0.53 to a high of $0.73, compared to a consensus estimate of $0.61, with number of estimates being 32 and the co-efficient variance 8.22. Beginning with 1Q'10, Amazon will recognize a greater portion of Kindle device sales revenue when the eReader ships. If the company sells ~1M units in Q1, the impact of this change is estimated to be a ~$250M revenue boost. Now that the iPad has been released, there is a significant advantage for Amazon. As the book industry becomes more digitized, there will be more opportunities to increase revenue through individualized product recommendation and the company who has the best discovery engine will be the winner. In January 2010, Amazon's Board of Directors authorized a program to repurchase up to $1 billion of our common stock, replacing their previous share repurchase program. Furthermore, Amazon is adopting accounting standard update #2009-13, Revenue Recognition, Multiple Delivery Revenue Arrangements as of January 1, 2010. Amazon.com is a material share gainer of online usage /commerce, share of mobile commerce should be higher than its share of desktop commerce, 5-15% of revenue could be derived from mobile devices within 5 years, and gaining out-sized share of products ranging from flat-panel TVs to home-audio products. Finally, Amazon plans to remain heads-down focused on driving a better customer experience through price, selection and convenience and believes in putting customers first as its the only reliable way to create lasting value for shareholders in Q1 2010.
The stock closed at $ 141.80, up 0.42% on April 12, 2010 and most analysts' recommend Amazon as a relative Overweight with a price target of $160. Amazon.com continues to surprise investors to the upside and the recent momentum should continue as the company benefits from an improving economy and a satisfied customer base. Some low-cost retailers have experienced a temporary benefit due to a challenging economy. However, Amazon.com's momentum is more than temporary owing to ‘Earth's largest selection' and superior customer experience because consumers do not need to leave Amazon.com to find ‘better' or brand name products. Instead the company can command greater wallet share as consumer's trade up to purchase more expensive items on Amazon.com. This trend is highlighted by Revenue per Active Customer which grew to $257 in C2009, up 10% Y/Y from $234 in C2008 and vs. $162 from five years ago.
