Eagle-eyed investors are looking past Amazon.com Inc’s double-digit growth in first-quarter earnings to spot signs that the Web retailer is not immune from broader economic uncertainty.
Even as Amazon’s chief financial officer repeatedly said he didn’t see evidence of US shoppers changing habits ahead of a possible recession, analysts on Wednesday were crunching numbers to find that the retailer had effectively lowered its sales expectations for the year.
Shares fell US$3.59, or 4.4 percent, to US$77.41 in after-hours trading. The stock had gained US$1.40 to close at US$81 before the first-quarter results were released.
YELLOW FLAGS
“Across the board, I wouldn’t say there are any major red flags, but there are enough yellow flags here,” said Tim Boyd, an analyst for American Technology Research.
He pointed to slower sales growth in both major US product categories — books, CDs and other “media” items, and electronics and general merchandise.
Adjusted for the effects of a weak US dollar, growth in international sales slowed down, too.
And while US margins improved, international margins worsened.
Amazon said that’s the expected result of offering items in new categories at aggressively low prices from the start.
Far from surprising, Boyd said Amazon’s sales seemed to be “returning to more normal growth” after a stronger-than-usual year last year.
Earnings in the January-March quarter climbed 29 percent to US$143 million, or US$0.34 per share, from US$111 million, or US$0.26 per share, in the same period last year. Revenue rose 37 percent to US$4.14 billion from US$3.02 billion in the year-ago quarter.
Both measures beat Wall Street’s expectations. Analysts surveyed by Thomson Financial had forecast, on average, a profit of US$0.32 per share on US$4.08 billion in sales.
“It is extremely impressive that they were able to grow like this in a difficult economic environment,” Boyd said. “People’s expectations have gotten ahead of what they [Amazon] can actually deliver.”
US ECONOMY
In a conference call on Wednesday, CFO Tom Szkutak downplayed the potential for US economic troubles to hurt the business, despite the fact that 51 percent of revenue came from North America in the quarter.
“We don’t have a lot of data points about the economy specifically, but what we’re seeing in our business is, it’s very solid,” he said.
Szkutak declined to answer questions about changes in what people were buying — more staples and fewer extras, perhaps? — or how much they were spending on each transaction.
Looking ahead to the rest of the year, Amazon forecast sales of US$19.1 billion to US$20.0 billion in revenue, more than the retailer had predicted three months ago.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
RSS