Amazon Margin Collapse: Revenue Beat, Earnings Miss Big, Cuts Forward Operating Income

Tyler Durden's picture

A company with already razor thin margins comes out and while it beats revenues, reporting $9.86 billion in sales on expectations of $9.54 billion, it literally shits the bed on the bottom line, reporting $0.44 EPS on expectations of $0.61, proving that this mythical "margin collapse" thing is actually really real. And the icing on the cake: it provides an operating income guidance range for Q2 of $95 million to $245 million. Expectations? $369.5 million. Can you spell Timber? Market sure can.

AMZN Second Quarter 2011 Guidance

  • Net sales are expected to be between $8.85 billion and $9.65 billion,
    or to grow between 35% and 47% compared with second quarter 2010.
  • Operating income is expected to be between $95 million and $245
    million, or between 65% decline and 9% decline compared with second
    quarter 2010.
  • This guidance includes approximately $180 million for stock-based
    compensation and amortization of intangible assets, and it assumes,
    among other things, that no additional business acquisitions or
    investments are concluded and that there are no further revisions to
    stock-based compensation estimates