Amazon (AMZN) is scheduled to report results of its first fiscal quarter after the market close on Thursday, April 25, with a conference call scheduled for 5:30 pm ET. What to watch for:
1. 'NOISY' GUIDANCE: Following the company's fourth quarter report, Baird analyst Colin Sebastian said Amazon's results were "solid but noisy," as he expected. The analyst cited India headwinds, some macro uncertainty, and the ramping investment cycle as things that could weigh on the 2019 outlook and investors' sentiment. In a recent preview of the company's first quarter report, Sebastian said he expects results "generally in line with street expectations," but added that he thinks the Q2 outlook could be "noisy" and potentially below consensus due to management plans to re-accelerate infrastructure and product investments. The analyst, who noted that Amazon's shares are up 13% since the company's last reporting date, kept an Outperform rating on the stock.
2. CLOUD: Last quarter, Amazon reported Q4 Amazon Web Services net sales of $7.43B, which was up from $5.11B in the same quarter of the prior year. AWS operating income grew to $2.18B from $1.35B in the prior year period. On February 25, The Information said AWS customers are often surprised by enormous cloud bills. As an example, Amir Efrati and Kevin McLaughlin of The Information noted that Pinterest (PINS) executives during last year's holiday season were surprised to see that the company's computing bills on AWS shot past their expectations.
3. NO HQ2 IN NYC: On February 14, Amazon confirmed in a blog post that it had decided not to move forward with plans to build a headquarters in Long Island City, Queens. "While polls show that 70% of New Yorkers support our plans and investment, a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project we and many others envisioned in Long Island City," the company said at the time, adding that it did not intend to reopen the HQ2 search. Amazon noted that it will proceed as planned in Northern Virginia and Nashville and "will continue to hire and grow across our 17 corporate offices and tech hubs in the U.S. and Canada."
4. BEZOS' DIVORCE DEAL: On April 4, MacKenzie Bezos announced that she had given ex-husband Jeff Bezos all of her interests in the Washington Post and Blue Origin along with "75% of our Amazon stock plus voting control" of her shares. According to CNBC's Lauren Feiner, citing a filing with the Securities and Exchange Commission, MacKenzie retained shares representing about 4% of Amazon's outstanding common stock, making her the third-biggest shareholder at the company, behind Jeff and Vanguard.
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