Amazon (AMZN) Q3 2024 Earnings Report

Amazon will report third-quarter results after the market closes on Thursday.

Here's what analysts expect:

• Earnings: LSEG expects $1.14 per share
• Revenue: LSEG expects $157.2 billion
• Amazon Web Services: According to StreetAccount, $27.5 billion
• Advertising: According to StreetAccount, $14.3 billion

The company warned in its most recent earnings report that third-quarter sales could take a hit due to the unusually busy news cycle. Amazon CFO Brian Olsavsky said in August that the company had seen shoppers distracted by a combination of world events, including the Paris Olympics and the attempted assassination of former President Donald Trump at a rally in Pennsylvania July.

“Customers have limited attention,” Olsavsky said at the time, and those factors made it “a difficult quarter to predict.”

Wall Street is forecasting revenue growth of around 10% for the quarter, which would mark the fifth straight quarter of low double-digit growth and a slight slowdown from a year ago, when sales rose 12.6%.

Revenues are growing much faster, largely due to Amazon CEO Andy Jassy's extensive cost-cutting efforts. From 2022 to 2024, Amazon initiated the largest layoffs in its history, eliminating more than 27,000 jobs. Jassy has taken a tougher stance on the company's unproven and costlier bets than his predecessor, Amazon founder Jeff Bezos.

The company has continued to restructure its teams this year, announcing last week that it would shut down its fast delivery service Amazon Today. A small number of employees were subsequently laid off, CNBC reported.

According to StreetAccount, Amazon is expected to report operating profit of $14.7 billion during the quarter, up more than 31% from a year earlier. The company forecast an operating profit of between $11.5 billion and $15 billion in August.

Wall Street has applauded Jassy's cost-containment campaign, with Amazon shares up about 23% year to date. The Nasdaq has gained around 30% over the same period.

“I think what's changed in the last year or two is that the relatively new CEO has started to drive real operating revenue and profit margins in the retail business,” Brad Erickson, senior analyst at RBC Capital Markets, told CNBC's ” Squawk Box” on Wednesday. “And that, in my opinion, has created and is retaining a whole new group of investors in this name.”

Amazon and Applewhich also reports quarterly results on Thursday, rounds out a busy week of gains in the technology sector. Google parent alphabet reported third-quarter profit that beat expectations, helped by underwhelming results in its cloud unit. Microsoft And Meta released earnings reports on Wednesday.

In the third quarter, Amazon held its annual Prime Day mega sale in July. Amazon said it had achieved “record-breaking sales” since Prime Day, but the company did not provide specific figures. U.S. online spending during the promotional event rose 11% year-over-year to a record $14.2 billion, according to data from Adobe Analytics. That was roughly in line with expectations of $14 billion in sales.

Analysts are eager for an update from Amazon executives on the company's plans for its Project Kuiper satellite internet service. Amazon has announced it will invest more than $10 billion to build a network of 3,236 satellites in low Earth orbit that will provide high-speed broadband internet services to people around the world who lack such access. Outside analysts have estimated that Amazon may need to spend up to $20 billion to get the project off the ground, GeekWire reported, citing data from market research firm Quilty Space.

“While there are risks to the timing/success of satellite launches and regulatory milestones, the downside is quantifiable as mgmt envisions a lifetime investment of $10 billion,” said Oppenheimer analyst Jason Helfstein, pointing to the success of SpaceX's Starlink as an indicator. The company has an outperform rating on Amazon stock.

“We see a significant long-term revenue opportunity with an audience of more than a billion people,” Helfstein added.

Amazon launched its first two prototype satellites into orbit on a United Launch Alliance rocket last October. The company has pushed back its first full Kuiper mission to early 2025 rather than the first half of the year because its rocket supplier ULA is prioritizing two US Space Force missions.

Amazon will discuss the report on a conference call with analysts at 5:00 p.m. ET. The press did not receive an invitation to a media call that typically occurs with Olsavsky after the company releases its earnings results.

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