Goldman Sachs Thinks Amazon’s Earnings Will Disappoint

Goldman Sachs predicted Wednesday (Oct. 25) that eCommerce giant Amazon will offer up quarterly earnings that fail to meet Wall Street expectations.

According to news from CNBC, Goldman Sachs said that operating income will likely fall below Wall Street views when the company reports third quarter (Q3) results on Thursday (Oct. 26).

“We expect the company to guide total revenue +26-34 percent year over year with $0mn to $1.0bn in GAAP operating profits, as guidance factors in the Whole Foods acquisition, [Amazon Web Services] growth accelerates modestly on an 800bps easier comp, and both revenue and expenses reflect the investments in new fulfillment centers and AWS regions,” Heath Terry, a Goldman Sachs analyst, said in a research note to clients that was covered by CNBC.  

That call on the part of Goldman Sachs comes as at least one research firm, eMarketer, is upbeat about the online retailer’s prospects for this year. Earlier in the week, the research firm said it thinks Amazon will end the year controlling roughly $0.44 of every dollar spent on eCommerce, an increase from $0.38 a year ago.

All told, Amazon will account for 43.5 percent of all eCommerce sales this year. What’s more, the research firm is forecasting Amazon’s sales to be up 32 percent year over year, reaching $196.8 billion in 2017. Last year, its market share stood at 38 percent, with sales of $149 billion for all of 2016.

Apple, eBay and Walmart round out the top four but are way behind Amazon in terms of sales, Recode noted. Research firm eMarketer predicts eCommerce sales will jump 15.8 percent to $452.8 billion for 2017. When considering all retail sales, eMarketer said Amazon accounts for close to 4 percent of all retail transactions in the United States.

These aren’t the only good data points for Amazon so far this month. According to Fortune, Consumer Intelligence Research Partners (CIRP) estimates that Amazon currently has 90 million U.S.-based Amazon Prime subscribers. In fact, 63 percent of the eCommerce retail giant’s customers are Prime members, and in the past 12 months, the total subscriber base has grown by 38 percent.


Exclusive PYMNTS Study: 

The Future Of Unattended Retail Report: Vending As The New Contextual Commerce, a PYMNTS and USA Technologies collaboration, details the findings from a survey of 2,325 U.S. consumers about their experiences with shopping via unattended retail channels and their interest in using them going forward.