Stifel Nicolaus sees 'strong' 3Q earnings for Amazon |
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Tue, 23 Oct 2007 19:15
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NEW YORK (Thomson Financial) - Amazon.com Inc., which reports after the closing bell Tuesday, is expected by analysts at Stifel Nicolaus to report 'strong' third-quarter earnings.The strength in the earnings, the firm wrote in a note to clients, is because of currency, recent initiatives and sales of the latest 'Harry Potter' book.'Our call is not that AMZN misses the quarter,' the firm wrote. 'Quite the opposite, our call is that AMZN beats but that investors begin to look forward at decelerating incremental operating margins in 4Q07 and 2008, a slowing U.S. economy, more difficult revenue growth comps, and a stock afforded a premium valuation.'Stifel Nicolaus said Amazon 'continues to be a well-positioned company' but it recommends investors examine eBay Inc. if they want exposure to an online retailer because of its recent growth.As for Amazon's growth, Stifel Nicolaus wrote the company has 'an easy revenue comparable' in its third quarter since Harry Potter will help growth by 'as much as two percentage points.' The firm cautioned it is important to review the company's growth outside of the book's sales as 'signs of deceleration of core organic revenue growth would not be well received.'Stifel Nicolaus rated Amazon a 'sell' and estimated full-year earnings of $1 a share, 9 cents below the mean estimate of analysts polled by Thomson Financial.For the third quarter, analysts see earnings of 18 cents a share on revenue of $5.16 billion.Shares of Amazon rose 7.7% to $98.30.Ryan Vlastelicarv/jwCOPYRIGHTCopyright Thomson Financial News Limited 2007. All rights reserved.The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
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