MIXED DECISION FOR AMAZON. “..uncertainty in India and a possible uptick in spending threaten to cut short that streak.” By Todd Horwitz, Bubba Trading.


Amazon Has Mixed Day

Amazon.com Inc. recorded a third straight record profit, but uncertainty in India and a possible uptick in spending threaten to cut short that streak. For the all-important holiday quarter, Amazon reported its profit topped $3 billion for the first time, jumping 63% from a year earlier. The company has been taming its operating costs, and profitable businesses like cloud computing, advertising and the services it offers sellers on its site have helped offset the lower margins of its traditional retail business.

Amazon has few financial trouble spots. But the company on Thursday warned that government restrictions in India could crimp its revenue there. And it cautioned that spending is likely to increase this year as it continues to build out its warehouses and other infrastructure. While the Seattle retailer’s revenue remains double what it was three years ago, growth has slowed for three straight quarters. Revenue in 2018’s final period rose 19.7% to $72.38 billion, the smallest quarterly jump since 2015.

Amazon forecast revenue of $56 billion to $60 billion for the current quarter, below a consensus analyst estimate of $60.83 billion, according to FactSet. On the low end of Amazon’s range, revenue would be up only about 10% from a year earlier. That would amount to its worst showing since 2001, though analysts caution Amazon is often conservative with projections.

International sales growth also slowed to 15 percent compared to the previous year’s 29 percent growth rate. India has been a notable challenge for Amazon, and the company wasn’t able to provide much clarity about what to expect from here. Amazon has been on a hiring spree in India, but a new law will soon kick in that prevents foreign online retailers from selling products through affiliated companies. “There is much uncertainty as to what the impact of the government rule change is going to have on the e-commerce sector there,” Brian Olsavsky, Amazon CFO said on the call. “Our main issue and our main concern is trying to minimize the impact to our customers and sellers in India.”

Todd “Bubba” Horwitz


Financial Markets and Political Commentary


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About the author

Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.