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Amazon (AMZN) earnings Q3 2022

Andy Jassy, CEO of Amazon after which CEO of net companies at Amazon.com Inc., speaks throughout the Amazon Web Services (AWS) Summit in San Francisco, California, U.S., on Wednesday, April 19, 2017.

David Paul Morris | Bloomberg | Getty Images

Amazon stories third-quarter earnings after the bell on Thursday.

Here’s what analysts expect:

  • Earnings: 22 cents per share, based on Refinitiv estimates
  • Revenue: $127.45 billion, based on Refinitiv estimates
  • Amazon Web Services: $21.1 billion, based on StreetAccount estimates
  • Advertising: $9.48 billion, based on StreetAccount estimates

Like the remainder of Big Tech, Amazon has had a rocky year as far as it confronts macroeconomic headwinds, hovering inflation and rising rates of interest. Those challenges have coincided with a slowdown in Amazon’s core retail business, as shoppers returned to procuring in shops.

Under CEO Andy Jassy, who took the helm from founder Jeff Bezos in July 2021, Amazon has responded to rising bills by aggressively slicing prices throughout quite a few divisions in latest months. It shed warehouse space, halted some experimental projects, shuttered its telehealth service and froze hiring for company roles in its retail business.

Still, analysts expect Amazon to report strong third-quarter outcomes, due to simpler comparisons with final year’s numbers and a possible gross sales enhance from its annual Prime Day low cost occasion, which was held in July.

Revenue development is projected to return in at 15%, marking a return to double-digit growth after three straight quarters of development within the single digits.

Another brilliant spot could possibly be Amazon’s promoting unit, which has been extra resilient in comparison with friends together with Meta, Alphabet and Snap, whose adverts companies have gotten whacked because of the financial atmosphere and Apple’s iOS privateness adjustments final year.

On Tuesday, Alphabet missed expectations for the third quarter, and YouTube’s advert income declined for the primary time since Google began breaking out outcomes for the streaming video unit. Facebook mum or dad Meta stumbled once more on Wednesday, issuing disappointing earnings and a weaker-than-expected forecast for the fourth quarter.

“Besides allocation to TikTok, budget shift to lower funnel activities is the consistent point of feedback in our conversations with marketers this quarter,” mentioned Rob Sanderson, a managing director at Loop Capital who recommends shopping for Amazon shares, in a latest notice to shoppers. “Amazon is the lowest on the funnel.”

Wall Street may also be paying shut consideration to Amazon’s fourth-quarter steerage. The forecast may sign how a lot demand Amazon expects to see throughout the vacation procuring interval. Analysts are already girding for a lackluster season, with on-line gross sales anticipated to develop simply 2.5%, based on Adobe.

Earlier this month, Amazon hosted a 48-hour Prime Early Access Sale, which was the primary time it has held two main low cost occasions in the identical year. The occasion jump-started the vacation procuring interval early, and it may assist juice Amazon’s gross sales within the fourth quarter. Analysts surveyed by Refinitiv are projecting fourth-quarter income of $155.15 billion.

Analysts have taken completely different approaches to their per-share earnings estimates due to Amazon’s hefty funding in electric-vehicle maker Rivian, which went public late final year. The plunge in Rivian’s share worth pressured Amazon to take a mixed $11.5 billion markdown within the first two quarters of 2022. However, Rivian shares rebounded a bit within the third quarter, climbing 28%, which may lead Amazon to mark up the funding.

Amazon shares have slid 34% to date this year, whereas the S&P 500 index has dropped 20% over the identical interval.

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