Amazon beats on Q1 earnings, however gentle Q2 steerage sends inventory sliding

Amazon (AMZN) reported its first quarter earnings after the bell on Thursday, beating on the highest and backside traces, however supplied lighter-than-anticipated steerage for its Q2 working revenue.

For the quarter, Amazon noticed earnings per share (EPS) of $1.59 on income of $155.7 billion. Wall Avenue was anticipating EPS of $1.36 and income of $155.1 billion, in response to Bloomberg consensus estimates. The corporate reported EPS of $0.98 and income of $143.3 billion in Q1 final yr.

AWS income got here in at $29.3 billion inline with expectations.

For the second quarter, Amazon stated it anticipates working revenue of between $13 billion and $17.5 billion. Analysts had been anticipating $17.8 billion. The corporate noticed working revenue of $14.7 billion in Q2 2024.

The corporate additionally stated it anticipates a 10-basis-point affect to its Q2 gross sales.

Amazon inventory fell greater than 4% following the report.

Amazon’s announcement comes after a dustup with the Trump White Home on Tuesday over a Punchbowl Information report that the corporate was making ready to incorporate the affect of tariffs on product costs.

White Home press secretary Karoline Leavitt referred to as the transfer “a hostile and political act,” and CNN White Home reporter Alayna Treene stated President Trump personally referred to as Bezos to complain in regards to the plan.

Amazon has since denied that it was going so as to add tariff pricing to its important e-commerce web site.

“The workforce that runs our ultra-low price Amazon Haul retailer thought of the concept of itemizing import costs on sure merchandise,” Amazon spokesperson Tim Doyle stated in an announcement. “This was by no means authorized and isn’t going to occur.”

Throughout a Tuesday afternoon briefing, Trump commented on the matter, saying, “Jeff Bezos may be very good. Terrific. He solved the issue in a short time. He did the precise factor. Good man.”

The episode highlights the precarious place tech firms face as they work to navigate the truth of Trump’s tariffs and the specter of potential reprisals from the White Home.

Learn extra: The most recent information and updates on Trump’s tariffs

With items imported from China going through a 145% tariff and different international locations going through a blanket 10% tariff, UBS analyst Stephen Ju estimated in an investor word that some 50% or extra of merchandise bought on Amazon will face some sort of tariff-related value enhance.

“Shoppers due to this fact may need to make tougher decisions on the place to allocate their {dollars},” Ju wrote.

“We additionally must assume that there might be second order impacts as exporters to the US are doubtless going to face decrease income and because of this might must make changes to their enterprise/headcount wants, which can affect employment globally and downstream [gross merchandise value] development internationally as nicely,” Ju added.