Earnings Week Recap + Amazon Earnings Blowout
It’s been an action-packed earnings week, and the news hasn’t let up today: today, Amazon (NASDAQ
And yet, we’re seeing the complex dynamics that have ruled the week continue: huge profit numbers aren’t generating a true bull run. Today, markets opened up nicely but promptly began giving up their gains. Major indexes are fighting to stay just above zero at the time of this writing. Stellar corporate earnings are dueling with macroeconomic data indicating some underlying trouble. Nevertheless, consumer sentiment remains strongly positive, and volatility looks to be the rule for the foreseeable future.
It’s hard to find negatives in today’s earnings report from Amazon. Amazon Web Services continue to operate as an huge cash generator, with revenues up 49% for the first quarter. This rich cash flow continues to allow Amazon to rapidly expand in lower-margin lines of business without stretching their finances. AWS now constitutes 11% of Amazon’s overall revenue, and an even higher share of profits.
Investors poured into the stock on the news, driving post-announcement gains over 8.5%. The stock has since pulled back to gains around 3.4% at the time of this writing.
This behavior has been common this week: we covered Alphabet’s earnings results on Tuesday. (NASDAQ
Facebook’s earnings, which we covered Wednesday, didn’t hold to the trend (NASDAQ
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