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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?

 


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Thu, 01/30/2014 - 17:41 | Link to Comment Stoploss
Stoploss's picture

Droned!!

Thu, 01/30/2014 - 17:48 | Link to Comment Rainman
Rainman's picture

Bezos jinxed by the Washington Pravda deal...well. every dog has his day

Thu, 01/30/2014 - 17:56 | Link to Comment kliguy38
kliguy38's picture

don't worry when Beezer brings out the drones.......you'll buy or else

Thu, 01/30/2014 - 18:03 | Link to Comment max2205
max2205's picture

Not to worry  AMZN is a govt stock aka goog ibm ba ect.

Thu, 01/30/2014 - 18:04 | Link to Comment dryam
dryam's picture

Effin BS, my broker told me earnings don't matter.

Thu, 01/30/2014 - 18:13 | Link to Comment NoDebt
NoDebt's picture

So what if they lose money on evey sale?  THey'll make tn volume.

Thu, 01/30/2014 - 18:20 | Link to Comment philosophers bone
philosophers bone's picture

There are too many people who are a combination of impulsive buyers, on-line shopping addicts, bored out of their minds and broke with too much time on their hands.  This is a deadly combination for Amazon and other online retailers as these people order shit and abuse the "free return" policy.  The "free return" policy ain't free for the retailer paying for it.

Thu, 01/30/2014 - 18:45 | Link to Comment Obchelli
Obchelli's picture

Yes but it just lost what it coveniently gained before earnings announcement (even little less) So they are still 80 cents up on a day on horrible earnings - and be sure that Satan Like Bill Miller with his concentrated position who employes squeeze the shorts in most shitty stock approach will take it up to new highs.

 

Rallied 30 points up as I was typing - just unbeleivable manipulation in this name.. I won't be surprised if they close it sharply up tomorrow...

Fri, 01/31/2014 - 02:19 | Link to Comment Handful of Dust
Handful of Dust's picture

The 5% postal rate increase isn't helping, either.

Fri, 01/31/2014 - 07:07 | Link to Comment fx
fx's picture

AMZN just needs to accept bitsh!t so that fonestar und his ilk can trade all their tulipcoins for AMZN's merchandise. Will boost revenues multifold. Profit margins? Not so much, but profits are, so old-school and uncool anyway.

Thu, 01/30/2014 - 18:03 | Link to Comment dryam
dryam's picture

delete. double post

Thu, 01/30/2014 - 18:04 | Link to Comment kaiserhoff
kaiserhoff's picture

Well, if we valued Amazon as a retailer, which it is, and forget for the moment, that it really has no margins...

15 X trailing PE ~ OMFG, under 10 bucks a share!

That can't be right.  Someone call the Washington post, and put a spin on this.

Thu, 01/30/2014 - 17:57 | Link to Comment SilverIsKing
SilverIsKing's picture

It's AMaZiNg!

Thu, 01/30/2014 - 18:08 | Link to Comment Haager
Haager's picture

+1 for the effort.

Thu, 01/30/2014 - 17:56 | Link to Comment El Viejo
El Viejo's picture

Do people still read in this country??

Thu, 01/30/2014 - 18:06 | Link to Comment kaiserhoff
kaiserhoff's picture

Yes,

texts, tweets, and tea leaves, in roughly that order. 

Thu, 01/30/2014 - 18:12 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

I read my horoscope, and I read what Kim K. is doing as I wait in line to buy my hot pockets.

Fri, 01/31/2014 - 01:01 | Link to Comment tempo
tempo's picture

Only users/clicks matter, get with the new world order

Thu, 01/30/2014 - 17:41 | Link to Comment buzzsaw99
buzzsaw99's picture

amzn being down is one of the seven signs of the apocalypse

Thu, 01/30/2014 - 17:52 | Link to Comment Unprepared
Unprepared's picture

MyZone

Thu, 01/30/2014 - 19:09 | Link to Comment mofreedom
mofreedom's picture

My wife turned them on to me and they are great, easy to do online business with just like Fedex.  Win or lose for them, means lose or win or somebody else.

Thu, 01/30/2014 - 17:43 | Link to Comment gjp
gjp's picture

Don't crow too fast.  Often it goes up right away.  Other times it waits till the next day to rip the shorts a new one.  But always in the end the bull-tards are the ones left crowing.  After all, Ben (and now Janet) still has their back.  It never was about the fundamentals as ZH knows all to well.

Thu, 01/30/2014 - 18:01 | Link to Comment fonzannoon
fonzannoon's picture

It was up 5% today. It's down 8% right now....Blah. Goog is now up. Barf.

Thu, 01/30/2014 - 18:06 | Link to Comment gjp
gjp's picture

My sentiments exactly.  Including day trading, GOOG up 8%, AMZN down 3%, NasCrap up 1.5%.  The bull-tards remain firmly in control.

Thu, 01/30/2014 - 17:44 | Link to Comment devo
devo's picture

growth and profits are just around the corner!

 

Thu, 01/30/2014 - 17:52 | Link to Comment 666
666's picture

The more they sell, the more they lose.

Sounds like the Fed, doesn't it?

Thu, 01/30/2014 - 17:52 | Link to Comment FieldingMellish
FieldingMellish's picture

AMZN didn't miss anything. It was the sell-side estimates that were way off. Financial jargon loves to distort relaity as much as possible.

Fri, 01/31/2014 - 07:11 | Link to Comment fx
fx's picture

Yeah, AMZN is right on target. A never ending, never-come-true dream so that nobody ever needs to value the stock on fundamentals. After all, a P/E on dreams and imagination can never bee too high.

Thu, 01/30/2014 - 17:45 | Link to Comment OldPhart
OldPhart's picture

Off topic...but there are numerous reports that the snow back east is 'weird'.  It doesn't melt, smells funky, actually chars, and 'behaves like styrofoam'.  Anyone else catching this?

 

http://www.youtube.com/watch?v=nZbdTviosiQ&feature=player_embedded

 

Thu, 01/30/2014 - 17:51 | Link to Comment Seasmoke
Seasmoke's picture

Well since it hasn't been over 32, for even one minute, the past 7 days...might have something to do with not melting. 

Thu, 01/30/2014 - 17:57 | Link to Comment Rainman
Rainman's picture

or its that damn FUKUSHIMA !

Thu, 01/30/2014 - 18:44 | Link to Comment Ness.
Ness.'s picture

Sublimation

Thu, 01/30/2014 - 17:59 | Link to Comment 666
666's picture

Perhaps it's radioactive fallout from Fukushima.

The snow here in NJ is cold but doesn't burn, and the yellow parts are very tasty. Yum, yum!

Thu, 01/30/2014 - 17:59 | Link to Comment Global Hunter
Global Hunter's picture

Watched your link and tried to burn the snow here (Ontario) but didn't get the same results, the snow melted normally.  Intrigued all the same.

Thu, 01/30/2014 - 19:17 | Link to Comment HelluvaEngineer
HelluvaEngineer's picture

Perhaps her house smells like syrofoam.  I'm watching it melt right now (in Atlanta).

There's a lot of ice under the snow currently.  Trying to make a snowball out of it would just make a slushy mess.

Thu, 01/30/2014 - 18:32 | Link to Comment Obama_4_Dictator
Obama_4_Dictator's picture

Wow you guys are dumb.....http://youtu.be/jPHkPE8WLKo

Thu, 01/30/2014 - 18:45 | Link to Comment Global Hunter
Global Hunter's picture

The guy who posted that video may be correct but he is a fucking arrogant douchebag

Thu, 01/30/2014 - 18:48 | Link to Comment Obama_4_Dictator
Obama_4_Dictator's picture

Mark Dice is awesome.  He's one of the good guys, trust me.  Awesome man on the street video featuring a 1oz gold coin...

 

http://www.youtube.com/watch?v=ndshbH3qZ6Y

Thu, 01/30/2014 - 20:22 | Link to Comment Harbanger
Harbanger's picture

Since basic science and math are no longer taught in schools you can see why people would fall for things like this. How else could they sell them on global warming and tax their carbon footprints.  Carbon is the basis for life on earth and one of the most abundant elements in the Universe, yet somehow now it's become a plague.  I came to the conclusion some people will believe anything as long as it's said in a slow, non-threateing monotone liberal voice, delivery is much more important than facts.

Fri, 01/31/2014 - 02:29 | Link to Comment Nick Jihad
Nick Jihad's picture

Just wait til these folks learn of the dangers associated with hydrogen hydroxide. Al Gore will go berserk!

Thu, 01/30/2014 - 20:21 | Link to Comment Harbanger
Harbanger's picture

2x

Thu, 01/30/2014 - 19:28 | Link to Comment chubbyjjfong
chubbyjjfong's picture

Monique says you're dumb.....http://www.youtube.com/watch?v=hirt3N1gwt8

Thu, 01/30/2014 - 19:30 | Link to Comment chubbyjjfong
chubbyjjfong's picture

..

Thu, 01/30/2014 - 17:46 | Link to Comment thismarketisrigged
thismarketisrigged's picture

this will be green shortly, i hope im wrong, but they always do this

Thu, 01/30/2014 - 17:46 | Link to Comment ifishivote
ifishivote's picture

Steve Lesson(CNBC) will be on soon to announce an Obama plan that all Americans must buy everything from Amazon.

Thu, 01/30/2014 - 17:48 | Link to Comment Cursive
Cursive's picture

What story could 60 minutes possibly dream up to divert attention away from this abortion?

Thu, 01/30/2014 - 17:50 | Link to Comment Seasmoke
Seasmoke's picture

This must be bad news for Gold. 

Thu, 01/30/2014 - 17:57 | Link to Comment Frank N. Beans
Frank N. Beans's picture

what's not?

Thu, 01/30/2014 - 17:50 | Link to Comment Music101
Music101's picture

Yes, but the stock was already up 5% today, so it's not quite as bad as it seems... See KARL DENNINGER'S take on AMZN in the video Below:

http://www.youtube.com/watch?v=XqWIS0O2gIk

Thu, 01/30/2014 - 18:02 | Link to Comment the wet spot
the wet spot's picture

Music101 - You're posting the same shit on every message board here.  I dub thee a SPAMMER

Thu, 01/30/2014 - 17:50 | Link to Comment TheRideNeverEnds
TheRideNeverEnds's picture

b...but the volume!  

 

I thought they would make up for it with volume!?

 

In related news.

Large cap momo stocks all dissapoint on earnings and guide lower: markets sharply unchanged.

Thu, 01/30/2014 - 17:50 | Link to Comment HaroldWang
HaroldWang's picture

Nah, the analysts will find a useless metric that was in line like margins after giving away more things for free was -5% and analysts expected -4%. Therefore, good enough to buy the lows. Happens every time.

Thu, 01/30/2014 - 17:51 | Link to Comment tawse57
tawse57's picture

500 bucks by close tomorrow. Amazon is like one of those zombies in a movie that will not die.

Thu, 01/30/2014 - 17:52 | Link to Comment nqs_alpha
nqs_alpha's picture

when AMZN is trading at a PE under 50x (and that's very generous), then we can say it has popped.

current PE is about 180x, so we still have at least another 70% down to go.

Thu, 01/30/2014 - 17:52 | Link to Comment tawse57
tawse57's picture

They are already buying the dip.

Thu, 01/30/2014 - 17:52 | Link to Comment Hal n back
Hal n back's picture

I got to find what the GAAP earnings were

Thu, 01/30/2014 - 17:57 | Link to Comment Frank N. Beans
Frank N. Beans's picture

I blame the weather.  Can I do that?

Thu, 01/30/2014 - 18:17 | Link to Comment ebworthen
ebworthen's picture

Sure.  The weather, and UPS; all their fault.

Thu, 01/30/2014 - 17:58 | Link to Comment DarthVaderMentor
DarthVaderMentor's picture

Amazon's ride down may have some more to go. Several states, like NC are forcing it to collect their sales tax (NC starts on Feb 1) in exchange for letting them operate warehouses in the state. I just made my last tax-free purchase today.

Thu, 01/30/2014 - 18:04 | Link to Comment ebworthen
ebworthen's picture

Precisely.

Amazon is big enough now that every single state is going to go after them.

People will then start to shop elsewhere (Wayfair, NewEgg, etc.).

Taxes equate to a 6%-10% or more loss of profit margin.

Thu, 01/30/2014 - 18:17 | Link to Comment whatsinaname
whatsinaname's picture

Wayfair is pretty good too. Got some good (fiat) deals there.

Thu, 01/30/2014 - 18:16 | Link to Comment Cursive
Cursive's picture

@DarthVaderMentor

I was going to sarcastically post that with operating margins of 1%, AMZN will have no prob absorbing the sales tax collections.  The only competitive advantage of AMZN was the absence of sales taxes.

 

ETA: I forgot the other competitive advantage of being a non-union shop (for now).

Thu, 01/30/2014 - 19:38 | Link to Comment FUBARian
FUBARian's picture

" I just made my last tax-free purchase today."

Don't you know that you owe use tax on your purchase? Nothing is "tax-free." Pay up!

A friendly reminder from your state and local government agencies.

Thu, 01/30/2014 - 22:56 | Link to Comment NunNun
NunNun's picture

The argument about sales tax seems like a red herring to me.  Maybe in the early days the sales tax savings drew people to Amazon but now they shop there for convenience and the customer service. Ordering couldn't be faster or easier and you can do so with confidence that the price is probably good. Customers don't have to waste time driving around, dealing with parking and so on.

 

Besides Amazon is a tech company that happens to sell books. Their growth is in EC2 and so on. For many companies the web IS Amazon.

Having said all of that sure I agree AMZN is overpriced. I just don't think interstate sales tax laws will do anything (which by the way I consider a violation of the commerce clause)

Fri, 01/31/2014 - 02:37 | Link to Comment Nick Jihad
Nick Jihad's picture

Amazon began collecting sales tax for the state of California. I don't know what they were thinking - it's 9%, and close to 10% if they are collecting city sales tax too. I don't know if they are collecting the city tax, cuz i've stopped using Amazon. That's huge, and it's not that hard to find online vendors who won't charge sales tax.

Thu, 01/30/2014 - 18:10 | Link to Comment ebworthen
ebworthen's picture

Down 12% now.

I think it's worth $50, maybe.

Thu, 01/30/2014 - 18:10 | Link to Comment Bunga Bunga
Bunga Bunga's picture

Icahn Tweets to the rescue, quick!

Thu, 01/30/2014 - 18:16 | Link to Comment SirTaxedAlot
SirTaxedAlot's picture

Bubblelicioius

Thu, 01/30/2014 - 18:23 | Link to Comment thismarketisrigged
thismarketisrigged's picture

i expect goog to go up every day for the rest of the year, with the occasional 3 dollar loss day,

 

talk about a fucked up stock, that stock never goes down, and if it god forbid has 1 day down, its erased either afterhours or the next day.

 

as for amzn, its already coming back a bit.

 

amzn and goog are worth 200 dollars combined, and i am prob being to nice with that amount.

Thu, 01/30/2014 - 18:27 | Link to Comment thismarketisrigged
thismarketisrigged's picture

yup, as i said, it was only a matter of time.

 

its now green for the day, not as high as it was at its highs of the day, but on my screen for the day, its green.

 

cant make this shit up

Thu, 01/30/2014 - 18:28 | Link to Comment earleflorida
earleflorida's picture

amazon was ok when you didn't pay taxes, but... wtf differentiates it now from a brick and mortar when one wants to get out and about except fo a huge discount on a faux product?

Thu, 01/30/2014 - 18:45 | Link to Comment ebworthen
ebworthen's picture

And, they've added so many sub-vendors that you get 4,287 results for a specific product search.

Not to mention that the customer reviews cross different versions of a product (eg. - Book versus DVD, different editions, etc.).

Thu, 01/30/2014 - 18:30 | Link to Comment dobermangang
dobermangang's picture

"It's just a flesh wound!"

http://www.youtube.com/watch?v=dhRUe-gz690

Thu, 01/30/2014 - 18:31 | Link to Comment ifishivote
ifishivote's picture

The stock is now postive on the day. This stock is to big. The Fed can not let it sink. It will take every think with it. Numbers miss and the guide lower..look for it to beup huge tomorrow.

Thu, 01/30/2014 - 19:00 | Link to Comment nakki
nakki's picture

This stock is one big joke was kicking myself for getting out of shorts in 380'S yesterday after seeing 359 AH. Just checked it again up to 390 are you kidding me? Miss , miss guide lower. The more people they sign up for Prime the more money they lose. Probably see 420-450 before next earnings. Total joke. Don't even get me started on Pandora, FB and Twitter.

Thu, 01/30/2014 - 19:22 | Link to Comment W74
W74's picture

Since Amazon (0 profits) and Housing are 98.ass% of the US economy....can we expect a stock exchange bloodbath tomorrow?

Thu, 01/30/2014 - 19:39 | Link to Comment whatthecurtains
whatthecurtains's picture

Sky is falling Sky is fallin.   Ah wait it's only down 5% now.   I'm sorry I normally worship ZH but I think you guys who are bearish on AMZN are going off the deep end on this one.

 

Thu, 01/30/2014 - 21:22 | Link to Comment mutty
mutty's picture

Seriously? Lowest margins in the history of this galaxy. It's good for consumers, buy stuff cheap. They won't ever be able to raise prices.

they will never be able to grow into this multiple. never. buyable at 20, 30, maybe 40 times training EPS.

 

It's a price action bubble. One of the greatest of the greater fool plays that exist today.  If the stock traded 90% below current prices it would still have twice the multiple of SP500.

 

Thu, 01/30/2014 - 22:17 | Link to Comment whatthecurtains
whatthecurtains's picture

if all they did were sell books and barbie dolls I'd agree.  You forget they have AWS/EC2 as well.   

Thu, 01/30/2014 - 20:00 | Link to Comment Bangin7GramRocks
Bangin7GramRocks's picture

They are not wrong about reality. Only wrong about the non-reality that is the stock market. Amazon couldn't earn a profit with a 6-10% price advantage over all other large retailers. How could it possibly get better for them? What is the future in the eyes of the Amazon believer? No stores, only internet and mega-warehouses with slave picker drones? Where will I see and feel a product? Get a real life demo? I like Amazon, but Bezos would need to become ruler of the universe to justify the current stock valuation.

Thu, 01/30/2014 - 21:40 | Link to Comment robertocarlos
robertocarlos's picture

Amazon ca has been good for me as I pay taxes no matter where I shop. They made some money from my CD orders and I've saved some money compared to HMV which is the only other seller in town. I had no idea Amazon had a free return policy.

Thu, 01/30/2014 - 22:02 | Link to Comment Magnum
Magnum's picture

They are going to use Drones for deliveries ha ha the jokes on us. That shyster Beezos will go down in history alright.

Fri, 01/31/2014 - 07:07 | Link to Comment limit_less
limit_less's picture

Exactly, you want to know where the QE cash is going? Look no further!

Do NOT follow this link or you will be banned from the site!