AMZN is expected to report fourth quarter earnings today after the bell. AMZN reported third quarter earnings at 4:00pm EST. There is a conference call scheduled for 5:30pm.

Capital IQ consensus calls for EPS of $1.83 and Revenue consensus of $59.85 bln

AMZN typically guides in the press release

Guidance

  • Co issued in-line guidance for Q4, sees Q4 revs of +28-38% to ~$56.0-60.5 bln vs. $58.92 bln Capital IQ Consensus. 
  • This guidance includes ~1,000 basis points of impact to their year-over-year growth rate from Whole Foods Market. 
  • This guidance also anticipates a favorable impact of ~$1.2 billion or 270 basis points from foreign exchange rates. 
  • Operating income is expected to be between $300 million and $1.65 bln vs. $1.64 bln ests, compared with $1.3 billion in fourth quarter 2016. Operating income guidance expected in the high end of the range.

Highlights from Last Quarter

Reported Q3 (Sep) earnings of $0.52 per share, $0.53 better than the Capital IQ Consensus of ($0.01); revenues rose 33.7% year/year to $43.74 bln vs the $42.26 bln Capital IQ Consensus

Options

Based on AMZN options, the current implied volatility stands at ~ 40%, which is 143% higher than historical volatility (over the past 30 days).

Based on the Weekly AMZN $1430 straddle, the options market is currently pricing in a move of ~6% in either direction by weekly expiration (Friday).

TECHS: 

I could not draw a more textbook channel for you if I'd tried. AMZN failed perfectly at the channel top. The inclination is that the stock will "disappoint" after hours from the chart alone. IF the stock does not look for a monstrous move higher. Im talking 15% range here.

Options premium for a 15% move sits at $3.4 as I write this so options premium is crazy out of wack.  

RESULTS:

  • Reports Q4 (Dec) earnings of ~$2.19 per share, excluding tax benefit, $0.36 better than the Capital IQ Consensus of $1.83; revenues +38% year/year (+36% ex-FX) to $60.45 bln vs the $59.85 bln Capital IQ Consensus; operating income +69% to $2.1 bln vs. $0.30-1.65 bln guidance and $1.51 bln ests. Operating cash flow increased 7% to $18.4 billion for the trailing twelve months.
    • NA sales +42% to $37.3 bln; operating income +107% to $1.7 bln. 
    • Intl sales +29% to $18 bln 
    • AWS sales +45% to $5.1 bln; OI +46% to $1.35 bln. 
  • Co issues in-line guidance for Q1, sees Q1 revs of $47.75-50.75 bln vs. $48.71 bln Capital IQ Consensus Estimate; operating income $300m-1.0 vln vs. $1.52 bln ests. This guidance anticipates a favorable impact of approximately $1.2 billion or 330 basis points from foreign exchange rates.