Amazon (AMZN) will report second quarter results this afternoon and will host a call at 17:30. 

Analysts expect Q2 operating income up 23% to $3.65 bln, with EPS up 9% to $5.54 and revenue up 18% to $62.6 bln. Amazon guided for Q2 operating income of $2.6-3.6 bln on revenue of $59.5-63.5 bln. 

The Street expects Q3 operating income up 18% to $4.38 bln with revenue up 19% to $67.36 bln. 

Amazon has beaten earnings estimates seven quarters in a row.

Amazon Web Services is expected to maintain strong growth (+42% in Q1) with healthy operating margins (+320 bps to 28.9%) after Microsoft's Azure showed the public cloud business continues to surge last week. 

Like big tech peers, Amazon is in the cross hairs of regulators. The company has nearly 50% eCommerce market share in the US.

TECHS:

With a market cap just under $1 trln, the stock trades at ~22x forward cash flow estimates, a premium to FB and MSFT

RESULTS:

Amazon misses by $0.32, beats on revs; guides Q3 revs in-line, operating income below

• Reports Q2 (Jun) earnings of $5.22 per share, $0.32 worse than the S&P Capital IQ Consensus of $5.63; revenues rose 19.9% year/year to $63.4 bln vs the $62.59 bln S&P Capital IQ Consensus.

• Operating income +3% to $3.0 bln vs. $2.6-3.6 bln guidance and $3.65 bln ests.

• AWS rev +37% to $8.38 bln; operating margin -140 bps.

• North American sales accelerate to +20% to $38.65 bln; operating margin -170 bps to 4.0%

• Co issues in-line guidance for Q3, sees Q3 revs of $66-70 bln vs. $67.36 bln S&P Capital IQ Consensus. Operating income is expected to be between $2.1 billion and $3.1 billion vs. $4.38 bln ests, compared with $3.7 billion in third quarter 2018.

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