Amazon 4Q EPS at 51C, Misses Estimates

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Jan. 30 (Bloomberg) –- Wedge Partners Principal Brian Blair and Bloomberg’s Olivia Sterns, Cristina Alesci, Cory Johnson, Adam Johnson and Trish Regan discuss Amazon earnings on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

Fourth-quarter earnings-per-share coming in at $.51 per share, a big miss for this estimate that $.69 per share, but the estimates for amazon you could have driven a truck right through them.

Estimates vary from one cent all the way up to $1.88, so they come in at $.51. the key question around amazon is how much are they actually spending?

How much does it cost them to deliver on the membership services.

How much do they spend to hire all those workers amid the surging demand for online shopping.

I'm interested to hear what brian has to say about all those numbers.

Also want to highlight what we are hearing from zynga.

They are said to be acquired natural motion and announcing job cuts after their fourth-quarter sales missed analyst estimates.

Let's get back to the amazon news.

Eps if you one cents versus estimates of $.69. was it really that challenging a holiday quarter?

They are spending a lot of money right now on prime.

Remember at the end of the holiday season -- what are they not many money on?

They are spending a lot of money getting product to people in today's, at the end of the holiday season, a lot of people did not get their presence, so amazon -- i remember that.

I was actually one of them.

And they are doing sunday delivery now.

I think what they are going to talk about on her call regarding the bottom line was there were some at a cost in the last two week of the -- the last two weeks of the quarter that were unexpected.

They also made up for some of that.

Ups was the one that had a breakdown in the shipping, but amazon came through.

They did with those credits.

And that's going to directly come from the bottom line.

By the way, sales -- no, amazon is down.

A very big miss on the sales.

Say what you want about the cost, but this was a huge miss on sales.

$25.6 billion is where it landed, and it was supposed to have been 26 billion dollars.

Does this say something about the consumer?

We have heard repeatedly from different retailers that it has been a challenging holiday season.

Absolutely.

There were some analysts on the street -- i was digging on analyst, but some analysts were looking at traffic numbers saying that ebay looks below what was expected and amazon looks like above what was expected, so there was a big trade on the street at was short ebay come along amazon, and you see that not working out.

Amazon numbers also not really blowing past what those kind of bullish estimates had been.

Best buy had a very public shortfall.

The stock was crushed.

A lot of people thought that it must be amazon taking business away.

What we are finding out was amazon took some business but not as much as people thought.

The consumer, to some degree, slowed down in the purchasing -- we have seen reports in the fourth quarter, seeing high-end retailers doing well and low-end retailers, and maybe we put amazon somewhere in there, not going well.

Early this week, we were talking about income inequality.

You can see it in the results of these companies.

Olivia.

There was one headline i saw that i wanted to jump in on because i think it really tells the story of what is going on with amazon.

They are saying for the fourth quarter, operating income came in at a profit at last.

This is a big deal because in the third quarter, they reported a net loss.

Did not matter.

Stock is up more than 20% since third-quarter earnings.

Meanwhile, the s&p overall has fallen about 2% since then.

Really interesting to see amazon in the fourth quarter finally in the black and look again in the first quarter for the forecast for the operating loss for the coming quarter, they say it could still be anywhere between $200 million net loss of to $200 million profit.

Epic the bottom line is when you look at sales numbers, it's telling you we still have a week consumer, and this is somewhat on -- this is somewhat of a surprise on the heels of some positive economic news.

The gdp numbers.

6.7% -- it's hard to argue with that given where we've been on the jobless front, but perhaps this is telling us those who say it's because people are giving up and they are not looking for a job right now -- maybe there's something to that because, clearly, people are not spending.

By the way, did you see the guidance?

This was unbelievable.

Revenue estimate for next quarter at amazon, if you look at the 50 or so analyst, 19.7 billion dollars, and the company saying it's going to be somewhere between 18.2 billion dollars and 19.7 billion dollars, so they are steering down about 1.5 billion dollars below the current estimate.

That's real money.

Do not forget, one of the other big trends in the holiday was a tremendous amount of aggressive discounting among all the retailers.

Walmart was really going hard after best buy, and they were all trying to keep up with amazon and this move to mobile shopping.

A lot of these guys saw a bit of a slowdown.

A billion lower from the street estimate -- i guess it's good for consumers because of all these guys are fighting with one another and lower prices, we are going to get some deals.

I hear you.

It's good for consumers, but at the same time, you want what's good for the company as well because at the end of the day, the company is the one employing those very consumers.

The conference call is going to be important because the discussion of capital expenditures is going to be a big deal.

For the year was actually down year over year.

That is not surprise me at all.

Nobody was investing in.

Amazon has been, jacking like crazy.

-- jacking -- jacking capex like crazy.

Click they said they were going to move distribution facilities close to major cities so they could do same-day delivery, to do sunday delivery, so you might have expected that capex to go up because of the closer proximity.

That's going to be one of the big trends, not just of 2014, but of the next few years, the idea of same-day delivery, instant delivery.

We are seeing a lot of startups pop-up tying to take on amazon in that regard.

Ebay has that ebay now, and that's been making headway.

It took me literally less than 10 minutes to get one of my favorite perfumes.

That's so great.

We do actually have to pay

This text has been automatically generated. It may not be 100% accurate.

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