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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 234.37+0.2%Dec 2 3:59 PM EST
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To: Oeconomicus who wrote (12831)8/7/1998 9:26:00 PM
From: umbro  Read Replies (1) of 164684
 
I say tomato, you say tomahto

The following table is from Zack's:

Earnings History
Jun 1997 Sep 1997 Dec 1997 Mar 1998 Jun 1998
Estimate -0.17 -0.21 -0.22 -0.24 -0.40
Actual -0.14 -0.18 -0.19 -0.20 -0.33
Difference 0.03 0.03 0.03 0.04 0.07
% Surprise 17.65% 14.29% 11.36% 16.67% 17.50%

[ URL: biz.yahoo.com ]

A pretty picture, eh? Another upside surprise? But wait.
Zack's is using the pro-forma earnings figure (without
adjustments for goodwill and their ammortized debt. Here's
what S&P says AMZN earned:
Amazon.com Posts 2Q Loss of $0.44 vs. Loss of $0.16
[ biz.yahoo.com ]

So, the investor who likes to buy upside EPS surprises sees
one here, but in fact AMZN came in below estimates. Or did it?
It depends upon whether the analysts use GAAP estimates in
their projections, or whether they use AMZN's home-grown
pro-forma EPS, which according to AMZN's news release
are "presented for informational purposes only". If
the company doesn't think those numbers should be used as the
definitive measure of their EPS, then why is it okay for analysts
at BARS (Benjamin) and DLJ?

And of course earnings estimates for the 1998 year will continue
to drop, so they'll be easier to beat. Per Zack's here is
the progression of EPS consensus estimates for calendar year 1998:

90 60 30 7 Current
days ago
-1.09 -1.21 -1.12 -1.25 -1.26

According to the recent EPS estimates that -1.26 figure will be
moved down to -1.56 or so (probably to adjust for loss due to
the recent acquisitions ... though the GAAP are likely to be a lot lower than that.)
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