What To Expect From Amazon’s Q2 Earnings

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Amazon (NASDAQ:AMZN) is scheduled to report its results for the second quarter on Thursday, July 28th. The company reported robust results in the first quarter, with net sales growing about 28% year-over-year (y-o-y) to $29.1 billion, compared to Reuters’ compiled analyst expectations of $28 billion. Its operating income more than quadrupled y-o-y to $1.07 billion, and net income increased from ($0.12) per share in Q1 2015 to $1.09 per share in Q1 2016, against consensus estimates of $0.55.

In Q2 2016, the company expects net sales of $28-$30.5 billion and operating income anywhere between $375 million and $975 million. amzn-55

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In the first quarter, Amazon’s company-wide operating margin improved considerably over the prior year quarter. It improved 180 basis points to 3.7%, driven by a significant year-over-year increase in profitability across the North American and AWS (cloud services) businesses. This indicates that both gross margin improvements (due to growing third-party business) and efficiency improvements are offsetting the increased investments in Prime and other growth initiatives. While the company should continue to see improved profitability going forward, Amazon’s margins could witness a slight drop in the near term owing to increased investments.

Have more questions about Amazon? Please refer to our complete analysis for Amazon 

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