Amazon (AMZN) is set to report Q3 results today after the close with a call to follow at 5:30pm ET.
The S&P CapitalIQ consensus calls for a 32% yr/yr decrease in non-GAAP EPS to just $0.21 from $0.31 a year ago.
Revenue is expected to grow 15% yr/yr to $127.47 bln, current guidance is $125-130 bln.
AMZN typically guides for revenue and operating income for the next quarter, but not EPS.
Microsoft (MSFT) reported that Azure growth in SepQ was a little light and MSFT guided to a pretty big sequential drop in DecQ. That is making investors nervous for Amazon's AWS unit and the stock is suffering because of it.
TECHS:
Overall, I am cautious heading into tonight's report. I suspect sentiment is quite negative and that is evident with the $10 decline in the stock since Tuesday's close (fueled by Azure news mostly). I’d look to spreads to capitalize on the large IV move with expectations calling for around an 12% move and options 25% more expensive than historical.
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