Amazon Dips on Lower 1st-Quarter Revenue Growth

Company reports revenue deceleration across its key businesses despite margins remaining strong Read More...

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="- By James Li

” data-reactid=”11″>- By James Li

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Amazon.com Inc. (AMZN), the Seattle-based e-commerce giant, said on Thursday that revenue for the quarter ending March 2018 increased 17% from the prior-year quarter.” data-reactid=”12″>Amazon.com Inc. (AMZN), the Seattle-based e-commerce giant, said on Thursday that revenue for the quarter ending March 2018 increased 17% from the prior-year quarter.

The online retailer reported net income of $3.6 billion, or $7.09 per diluted share, up $2.37 from the analyst estimate of $4.72.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Company reports revenue deceleration in both domestic and international markets” data-reactid=”14″>Company reports revenue deceleration in both domestic and international markets

CNBC columnist Eugene Kim said Amazon’s 17% net sales growth represented the “slowest expansion” since first-quarter 2015, when net sales increased just 15%. Net sales growth in domestic markets and international markets increased 17% and 9%, down from 46% and 34% during first-quarter 2018.

Management said during the earnings call one likely reason for the lower growth in international markets was a “quiet period” in India. Although unit growth was just 10% for the quarter, the unit growth excludes Amazon’s fast-growing businesses like Amazon Web Services, which increased 41% year over year.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Margins remain strong yet stock slightly falls” data-reactid=”36″>Margins remain strong yet stock slightly falls

Amazon closed at $1,902.25, giving a market cap of $936.01 billion. Despite this, the stock fell to a low of $1,901.75 in after-hours trading.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="As of Thursday, Bill Gates (Trades, Portfolio)’ Microsoft Corp. (MSFT) and Warren Buffett (Trades, Portfolio)’s top holding Apple Inc. (AAPL) are the two most valuable companies in the U.S., with market caps of $990.87 billion and $967.95 billion.” data-reactid=”38″>As of Thursday, Bill Gates (Trades, Portfolio)’ Microsoft Corp. (MSFT) and Warren Buffett (Trades, Portfolio)’s top holding Apple Inc. (AAPL) are the two most valuable companies in the U.S., with market caps of $990.87 billion and $967.95 billion.

GuruFocus ranks Amazon’s profitability 9 out of 10 on several positive signs, which include expanding profit margins, a strong Piotroski F-score of 7 and a business predictability rank of four stars. The company’s three-year revenue growth rate of 29.60% and three-year Ebitda growth rate of 50% are outperforming over 90% of global competitors.

Gurus with large positions in Amazon include Ken Fisher (Trades, Portfolio), Spiros Segalas (Trades, Portfolio) and Chase Coleman (Trades, Portfolio)’s Tiger Global Management.