Amazon (AMZN) is set to report Q2 results today after the close with a call to follow at 5:30pm ET. Last quarter, AMZN reported one minute after the bell, so investors should be on their toes.

The CapitalIQ consensus calls for a big drop in non-GAAP EPS to $1.65 from $5.22 a year ago.

However, revenue is expected to grow 28.2% yr/yr to $81.29 bln. AMZN typically guides for revenue and operating income for the next quarter.

Operating income is a metric that's closely watched. AMZN has previously guided to Q2 operating income of $(1.5)-1.5 bln while current consensus is at $1.13 bln.

AWS: The other key segment in this report will be AMZN's highly profitable Amazon Web Services (AWS) cloud computing offering.

TECHS

RESULTS:

Amazon beats by $8.68, beats on revs; guides Q3 revs above consensus; AWS segment sales rose 29% yr/yr to $10.81 bln  (3051.88 +18.35)

• Reports Q2 (Jun) earnings of $10.30 per share, $8.68 better than the S&P Capital IQ Consensus of $1.62; revenues rose 40.2% year/year to $88.91 bln vs the $81.27 bln S&P Capital IQ Consensus.

  • Operating income rose 89.5% yr/yr to $5.84 bln vs prior guidance of $(1.5)-1.5 bln while current consensus is at $1.13 bln. 

  • AWS segment sales rose 29% yr/yr to $10.81 bln, Q2 AWS operating margin was 31.1% vs 25.3% a year ago.

    • This is a slight slowdown from segment revenue growth of +33% yr/yr to $10.22 bln in Q1.

  • with operating margin of 30.1% vs 28.9% in the year ago period.

• Co issues upside guidance for Q3, sees Q3 revs of 87000-93000 vs. $86.36 bln S&P Capital IQ Consensus.

  • Co guides to Q3 operating income of $2.00-5.00 bln vs consensus of $2.90 bln.

• "As expected, we spent over $4 billion on incremental COVID-19-related costs in the quarter to help keep employees safe and deliver products to customers in this time of high demand—purchasing personal protective equipment, increasing cleaning of our facilities, following new safety process paths, adding new backup family care benefits, and paying a special thank you bonus of over $500 million to front-line employees and delivery partners."

• Co has created over 175,000 new jobs since March and is in the process of bringing 125,000 of these employees into regular, full-time positions.

• Third-party sales again grew faster this quarter than Amazon's first-party sales.

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