Andy Jassy, CEO of Amazon.Com Inc., during the GeekWire Summit in Seattle, Washington, USA, on Tuesday, October 5, 2021.
David Ryder | Bloomberg | Getty Images
Amazon shares jumped 10% on Friday, a day after the company posted stronger-than-expected second-quarter earnings and gave upbeat guidance.
Sales for the three months ended in June rose 7% to $121.23 billion, which was higher than the $119.09 billion Wall Street expected. It represented Amazon’s third consecutive quarter of single-digit annual revenue growth.
Amazon’s forecast for the third quarter suggested that sales growth could accelerate again, to between 13% and 17%. The company said it projects revenue this quarter of $125 billion to $130 billion, while analysts were expecting a sales forecast of $126.4 billion, according to Refinitiv.
Amazon and Apple reported upbeat results in another dismal earnings season for tech companies. Facebook parent Meta, Alphabet and Microsoft all reported disappointing results for the quarter as decades-high inflation, rising interest rates and other macroeconomic pressures weighed on their businesses.
Wall Street cheered Amazon’s earnings report, with one analyst calling the e-commerce giant “a port in the macro storm,” as it so far appears to be weathering many of the headwinds challenging its tech peers.
“Overall, Amazon delivered a very clean 2Q20 profit to investors amid extreme volatility in tech-related macro earnings,” Deutsche Bank analysts led by Lee Horowitz wrote in a note to clients on Friday. . The firm, which maintains a buy rating on Amazon shares, raised its price target to $175 from $155.
Some analysts said the results signaled Amazon is making headway in the cost headwinds that have pressured the company in recent quarters. Amazon has faced high costs related to labor, supply chain, energy and transportation, as well as the Covid-19 pandemic, among other factors. CEO Andy Jassy said Thursday that the company continues to work through “more controllable costs.”
“With a successful 2-day Prime Day event in July and mgmt [management] Discussing downstream demand concerns in its core businesses, we see Amazon well positioned to produce a strong revenue growth story in 2H’22 [the second half of 2022]Analysts at Goldman Sachs, led by Eric Sheridan, said in a research note on Friday. The firm maintained its buy rating on the stock.
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