Amazon (AMZN) is set to report Q1 results today after the close with a call to follow at 5:30pm ET.

CapitalIQ consensus calls for a 46% yr/yr decrease in non-GAAP EPS to $8.49 from $15.79 a year ago.

Revenue is expected to grow 7% yr/yr to $116.51 bln, current guidance is $112-117 bln.

AMZN typically guides for revenue and operating income for the next quarter, but not EPS.

Operating income is a metric that's closely watched. AMZN has previously guided to Q1 operating income of $3-6 bln, but AMZN tends to be conservative with this metric.

After missing on EPS pretty badly in Q3, Q4 was a nice bounce back quarter for Amazon

In terms of segments, its AWS unit is closely watched in Q4, AWS saw +39.5% growth

TECHS:

Amazon's EPS will be much lower than last year.

It has been facing inflation and higher labor costs.

Also, it will be lapping generous federal stimulus from early 2021, so that will impact growth rates.

Prime price increase, we'll listen for any pushback from customers. We doubt there was much churn. Also, with Netlfix (NFLX) reporting slowing subscriber growth, we will watch closely to see if AMZN's Prime Video is showing any weakness as well.

RESULTS:

Reports Q1 (Mar) earnings of $7.56 per share, is NOT comparable to the S&P Capital IQ Consensus of $8.50; revenues rose 7.3% year/year to $116.44 bln vs the $116.52 bln S&P Capital IQ Consensus.

  • Note: EPS includes a pre-tax valuation loss of $7.6 bln included in non-operating expense from its common stock investment in Rivian Automotive (RIVN).

  • Operating income fell 59% yr/yr to $3.67 bln, toward lower end of prior guidance of $3-6 bln.

  • AWS segment sales rose 36.6% yr/yr to $18.44 bln, that was a modest decline from +39.5% growth in Q4, +39% growth in Q3, +37% growth in Q2, +32% in Q1.

  • Advertising Services segment revenue grew 23% yr/yr (25% excluding FX) to $7.88 bln.

  • Co issues downside guidance for Q2, sees Q2 revs of $116-121 bln vs. $125.09 bln S&P Capital IQ Consensus.

    • Co guides to Q2 operating income of $(1.0)-3.0 bln, which is below street ests.

  • "The pandemic and subsequent war in Ukraine have brought unusual growth and challenges...With AWS growing 34% annually over the last two years, and 37% year-over-year in the first quarter, AWS has been integral in helping companies weather the pandemic and move more of their workloads into the cloud. Our Consumer business has grown 23% annually over the past two years, with extraordinary growth in 2020 of 39% year-over-year that necessitated doubling the size of our fulfillment network that we'd built over Amazon's first 25 years—and doing so in just 24 months."

  • "Today, as we're no longer chasing physical or staffing capacity, our teams are squarely focused on improving productivity and cost efficiencies throughout our fulfillment network....This may take some time, particularly as we work through ongoing inflationary and supply chain pressures, but we see encouraging progress on a number of customer experience dimensions, including delivery speed performance as we're now approaching levels not seen since the months immediately preceding the pandemic in early 2020."

  • Prime Day will take place in July in more than 20 countries.

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