Summary:
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Amazon to begin lower after latest results
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Shares fall as much as 9% in after-hours trade
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US100 respecting resistance around 8000 handle
One of the highlights of the current earnings season is Amazon’s latest figures and unfortunately for investors in the tech giant they have come in as something of a disappointment. Earnings fell for the first time in more than two years which caused the stock to swoon in after-hours trade by as much as 9%, which would wipe around $80B of the stock’s value should it begin at those levels this afternoon.
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Earnings per share: $4.23 vs $4.59 exp. Prior $5.75
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Revenue: $69.98B vs $68.83B exp. $56.58B
With rising revenues and falling profits it is clear that margins are being squeezed with the transition to one-day delivery for Prime customers seen as one area that has certainly played a role in this. “We are ramping up to make our 25th holiday season the best ever for Prime customers — with millions of products available for free one-day delivery,” Amazon Chief Executive Jeff Bezos said in Thursday’s earnings announcement. “Customers love the transition of Prime from two days to one day — they’ve already ordered billions of items with free one-day delivery this year. It’s a big investment, and it’s the right long-term decision for customers.”
Amazon’s stock is called to open below 1672, and if it does then that will represent a 7-month low for the market. Source: xStation
Even though the stock itself was closed when the results were released its impact could be seen in the Nasdaq (US100 on xStation) with the index dropping sharply around that time. Amazon is one of the largest components of this index with a weighting just shy of 10% so strong moves in the stock can have a clear impact on the benchmark.
The US100 fell by around 60 points in the 30 minutes after Amazon’s results were released. The level around 7995 has once more held firm as resistance with near-term support possible around 7915. Source: xStation
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