By Greg Bensinger
Amazon.com Inc. is scheduled to report third-quarter financial
results after regular trading hours Thursday. Here's what you need
to know:
EARNINGS FORECAST: Amazon is expected to post a net loss of
$335.4 million, according to analysts polled by Thomson Reuters,
wider than the $41 million loss of a year earlier. Excluding
certain items, analysts project a loss of 74 cents a share,
compared with a 9-cent loss last year.
REVENUE FORECAST: Revenue of $20.8 billion is forecast, up 22%
from $17.1 billion in the year-ago period.
WHAT TO WATCH: WITHERING PROFITS--Amazon has long been forgiven
for paltry profits or losses because of its consistently growing
sales. The third quarter should again show strong sales growth. But
investors are demonstrating less tolerance for Amazon's losses,
driving down the shares 21% this year. Investors rightfully may
wonder if Amazon will turn on the profit spigot by reducing
investment in some of its many projects.
HARDWARE STRATEGY--This year alone, Amazon has released a
dizzying number of devices, including its long-awaited smartphone,
a set-top box and several new versions of its Kindle e-readers and
Fire tablets. But the Fire smartphone has failed to spark many
sales, and it is not clear how the set-top box is performing.
Investors would like to hear Amazon outline its long-term strategy
for hardware development and disclose more about sales. If rival
Apple is any indication, they may be disappointed: The iPhone maker
says it won't disclose sales of its smartwatch when it starts
shipping next year.
HOLIDAY SALES--Observers will be looking closely for any read
from Amazon on its expected performance in the crucial
fourth-quarter selling season. The ecommerce giant was buffeted
last year by shipping delays that caused some orders to miss
Christmas, compelling Amazon to offer rebates. For now, analysts
project another big fourth quarter, with revenue rising an
estimated 21% to $30.9 billion. But investors will also be curious
about whether Amazon has worked out the kinks in its delivery
network to keep the holidays happy for its roughly 240 million
customers.
Write to Scott Thurm at Scott.thurm@wsj.com
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