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Amazon’s Q1 Earnings: Four Things We’ll Be Looking For

Another blockbuster quarter could push the company’s stock price to close to $1,000 a share. That’s an astounding landmark.

Amazon’s Q1 Earnings: Four Things We’ll Be Looking For
[Photo: eddygaleotti/iStock]

How much higher can Amazon shares go? We’ll know a little more tomorrow afternoon when the Seattle e-commerce juggernaut releases its first-quarter 2017 earnings. If we look at presentations over the past year, we see the company doing very well but still missing some key numbers—namely, revenue expectations that didn’t quite hit the mark three months ago. By contrast, tomorrow’s report could easily show a blockbuster quarter thanks to stronger revenue and the slew of new products that Amazon is investing in. If things go well, Amazon’s stock could inch even closer to $1,000 a share, which is an astounding landmark.

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Analysts are expecting the company to hit revenue of $35.31 billion, compared to $29.1 billion during the same period last year. Earnings-per-share is expected to hit $1.13, compared to $1.07 a year ago, reports the Seattle Times. That would be welcome news: Last quarter was considered a slight miss for Amazon, with revenue hitting $43.7 billion compared to expectations of $44.68 billion. Once tomorrow’s numbers are announced, all eyes will be on Wall Street’s reaction and whether the stock will go up or down. Lest we forget, it was about one year ago when Jeff Bezos made $6 billion in 20 minutes, thanks to a healthy earnings report.

Amazon is a huge company with its myriad tentacles in a growing number of operations. Needless to say, we’ll be looking out for quite a lot. But here are a few of the most important things we’ll be keeping track of tomorrow:

  • Web Services: While Amazon’s cloud segment has been seeing good growth–it is most definitely the leader in the space–AWS missed revenue expectations last quarter. As MarketWatch points out, Amazon has had to cut prices recently thanks to growing competition from the likes of Microsoft, Alphabet, and IBM. We’ll be looking at whether the cloud operation’s growth has taken a hit.
  • Video Dreams: For well over a year, Amazon has been pushing its digital content, both in the United States and in new markets like India. We’ll be interested to see if this Prime Video expansion will continue and how much the company plans to spend on original programming.
  • Prime: Amazon Prime is one the company’s most popular services. In the U.S. alone, estimates put Prime subscriptions at 80 million, which makes it larger than Costco, notes L2 analyst Cooper Smith. Legacy retail outlets like Walmart and Target are feeling the pinch, but how much bigger can Prime scale? We’ll be keeping an eye out for more specifics.
  • Products: Amazon has been slowly building and offering more features for its Echo product line, as well as expanding Alexa integrations. We’d like to know how well these product ventures are doing, and we’ll be looking out for clues about future projects down the line.

There is so much more to look out for–international sales numbers, details about brick-and-mortar Amazon stores, grocery efforts, etc.–and we’ll be paying close attention to all of that. Tune in tomorrow for Fast Company’s coverage of the earnings.

About the author

Cale is a Brooklyn-based reporter. He writes about business, technology, leadership, and anything else that piques his interest.

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