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Amazon Q2 Earnings Preview: 4 Things To Watch

With soaring sales and a Whole Foods acquisition on the horizon, some analysts think Amazon shares could blow past $1,100.

Amazon Q2 Earnings Preview: 4 Things To Watch
[Photo: courtesy of Amazon]

Since its last earnings call, big things have happened at Amazon. One, its stock price eclipsed $1,000 a share. Two, it announced plans to buy Whole Foods for $13.7 billion, a move that speaks to its seemingly insatiable supply-chain ambitions.

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So more eyes than usual will be on Amazon this Thursday as it reports second-quarter earnings for 2017. The Jeff Bezos-led e-commerce juggernaut expects sales to grow 20% year over year, hitting around $36 billion. As the stock has been rising, many analysts expect it to surge even higher following the report. According to FactSet estimates cited by CNBC, analysts expect the stock to hit $1,136, compared to its current price of $1,037.

Last quarter saw great Amazon results. Its revenue went up 23%, hitting $35.7 billion. And earnings per share were $1.48–well above analyst expectations. With a good earnings track record behind it, investors hope this trend will persist.

Here are four things we’ll be watching.

Amazon Web Services. Amazon’s cloud storage offerings continue to grow every quarter. This is one of the products that helps Amazon prove itself as a viable world technology leader beyond retail. Last quarter, Amazon Web Services hit $3.66 billion, and we’ll be looking to see what sort of growth it has seen over the last few months.

Groceries. Amazon is buying Whole Foods for $13.7 billion. While the deal wasn’t a huge surprise, it is the largest acquisition the company has ever made (as long as the deal actually happens). We’ll be interested to hear any new details about this deal, and any other big plans Amazon has for its grocery business.

Prime. Last quarter, Amazon reported huge growth for its retail subscription services that are mostly represented by Prime. We’ll be looking out to see if this growth will continue. Amazon’s Prime Day, although it happened after the end of the second quarter, hints at its ongoing momentum. The company says it broke sales records with its annual event, which seems to have morphed into a summertime Black Friday. The event was a major boon for Echo, which Amazon said outsold every other item. Hopefully, Amazon will divulge more information about just how well Prime Day went, and any other plans it has for Prime itself.

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International expansion. Some of Amazon’s biggest pushes are beyond U.S. borders. It’s been expanding Prime to new territories, as well as looking toward acquisitions that would help expand its e-commerce business around the globe. We’ll be looking out for more announcements like these that will illustrate where and how Amazon intends to spread its tentacles around the world.

There is surely a lot more Amazon could say during the call, including any developments on Echo, Alexa, and its smart-home ambitions. We’ll be keeping an ear out Thursday. Be sure to check out our live coverage then.

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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