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What to look for – The Motley Fool

Thursday afternoon, Amazon.com (NASDAQ: AMZN) will release its results for the first quarter of fiscal 2018. The online retail giant has shattered both the Wall Street estimates and its own estimates of the company in 2018, the holiday quarter that gives Amazon investors a 24% return on their investment in January alone.

Here's what to look for in this week's business update.

By Numbers

These are the headline numbers that will move the market on Friday morning. Amazon does not offer earnings guidance in the traditional sense, but instead focuses on operating income and sales:



2018 Guidance (Midpoints)

Q1 2018 Analyst Consensus

Q1 2017 Results [19659010] Revenue [19659010] $ 49.3 billion

$ 49.9 billion

$ 43.7 billion

Operating income

$ 650 million

Not applicable

$ 1.0 billion

Fitted Earnings per Share

N / A

$ 1.25

$ 1.48

Data Sources: Amazon, StreetInsider.com

What's New on Amazon

The monster built by Jeff Bezos is always in the headlines. The latest news feed includes:

  • Last fall, Amazon introduced a program that allowed the company's delivery drivers to drop parcels in their locked house using a combination of intelligent locks and digital surveillance to keep things safe , Now the company is extending this idea in a partnership with Volvo and General Motors (NYSE: GM) on luggage compartments. The in-house delivery program was reportedly well received by Amazon customers, but I expect analysts to refresh the safety aspects of the car trunk idea during the Thursday payout.
  • The Amazon Prime program has just reached an impressive milestone The company said it has more than 100 million subscribers. The program, which combines free shipping on many Amazon orders and access to the Prime Video Streaming service, was often seen as a driver of customer loyalty, but this is the first time Amazon has reported fixed subscriber numbers. Will Amazon make a habit of reporting? That remains to be seen, but we investors can always hope.
  • Surprisingly, the electronics wholesaler Best Buy (NYSE: BBY) recently announced the sale of televisions powered by Amazon's smart media operating system, known as Fire TV. The Amazon TVs will initially come from Toshiba and from Best Buy's Insignia store. Other names can follow later. I think children would call this partnership a "free-jerk" situation during this time.
  Amazon Web Services banner on black background.

Image source: Amazon Web Services

In addition to these newsworthy details, it pays to keep an eye on how Amazon Web Services contributes to the company's bottom line. For comparison purposes, cloud computing revenue in the last quarter stopped $ 5.1 billion, generating an operating profit of $ 1.35 billion. This represents an increase of 46% compared to the previous year and a share of 64% in the overall operating result of Amazon.

In addition, the company invests a lot of money in the real infrastructure. From delivery services and data centers to Whole Foods Store enhancements and prime video content productions, Amazon is running some capital-intensive projects. As a result, free cash flow in the fourth quarter of 2016 was $ 4.7 billion below the break-even point. In the last quarter, the value was $ 1.5 billion. Pay close attention to the generation of money in the first quarter – or lack thereof.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of the board of directors of The Motley Fool. Anders Bylund owns stocks of Amazon. The Motley Fool owns shares of and recommends Amazon. The Motley Fool has a disclosure policy.

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