Amazon Crashes After Missing Top And Bottom Line, Guides Lower

Tyler Durden's picture

Did the Amazon bubble just pop? Unless Jeff Bezos announces he is working on a space station that just may be the case, because while the company missed both the top and bottom line, and guided lower  - traditionally a perfect trifecta to send the stock soaring afterhours - the stock is plunging some 10% after hours, even if it now has a true bargain-basement LTM PE of 672x.

Specifically the Q4 results were as follows:

  • Revenue of $25.59 billion, missing expectations of $26.0 billion
  • EPS of $0.51, missing expectations of $0.69, and this despite using a far lower tax rate (39.7%), than used a year ago (57.6%)
  • Guides Q1 revenue of $18.2 - $19.9 billion, on the low end of the consensus estimate of $19.69 billion
  • Guides Q1 Operating Income of ($200)-$200 on expectations of $367.8 million.

Some other observations:

  • Worldwide net sales rose 22%: the lowest in year (see chart below), below the 26% in Q3 and below the 23% a year ago
  • Total employees rose to 117,300 (!), from 109,800 a quarter ago, and 91,300 a year ago.

Ironically it wasn't all bad, as Operating Income rose to $510 million, above the $490 million expected, and the highest single quarterly Operating Income in over 4 years. This was matched by Net Income of $239 million - the highest since December $416. Perhaps AMZN should have just continued losing money and burning cash, and all would have been well.

Unfortunately, those looking for a margin rebound will have to wait: at 1.0% LTM Operating Margin it has gone exactly nowhere since September 2012 and much lower compared to previous year. This happened even though Q4 operating margin bounced to 2% - the highest since June 2011, driven by the holiday spending season.

 

Putting it all together and you get something very troubling: the stock, which historically woudl have soared on news as bad as these, is plunging, and was down 10% at last check. 

Did the Jeff Bezos "myth" bubble finally pop?