All eyes are now fixed on e-commerce giant Amazon.com, Inc. (NASDAQ:AMZN) and coffee chain Starbucks Corporation (NASDAQ:SBUX), as both companies posted disappointing earnings, sending their shares lower in after-hours trading Thursday. Let's take a closer look:
Will Amazon Shares Drop Back Below $1,000 Post Earnings?
Amazon shares fell nearly 3% to $1,012 in after-hours trading Thursday. The reason? The online retail giant didn't meet earnings expectations of $1.42 per share, not even near. It reported earnings of $0.40 per share, a 78% miss. However, Amazon posted revenue of $38 billion, above consensus estimates of $35.34 billion, driven by acceleration in North America, International, Retail Products, Third Party and Subscription revenues. Looking ahead, second-quarter revenue guidance of $39.3-$41.8 billion was in line with consensus of $39.97 billion.
Amazon CEO Jeff Bezos commented, “Our teams remain heads-down and focused on customers [...] In the last few months, we launched Echo Show (our newest Echo device with a video screen), introduced calling and messaging via Alexa on all Echo devices, debuted Inside Edge on Prime Video (the first of 18 Indian Original Series), introduced Amazon Channels in both the U.K. and Germany, launched four new Fire tablets, expanded Amazon Fresh to Germany, launched Prime Now in Singapore, launched our 25th airplane with Prime Air, hired more than 30,000 new employees, opened three new Amazon Books stores, launched more than 400 significant AWS features and services, migrated more than 7,000 databases using AWS Database Migration Service, and held our third annual Prime Day — signing up more Prime members than ever before. It’s energizing to invent on behalf of customers, and we continue to see many high-quality opportunities to invest.”
On the ratings front, Amazon has been the subject of a number of recent research reports. In a report issued on July 26, Cantor analyst Kip Paulson maintained a Buy rating on AMZN, with a price target of $1,050, which represents a slight upside potential from current levels. On July 25, Piper Jaffray's Michael Olson maintained a Buy rating on the stock and has a price target of $1,200.
Starbucks Shares Slammed Following Disappointing 2Q Print
Starbucks shares plummeted nearly 6% this afternoon, after the company's fiscal third-quarter sales missed Wall Street’s projections. The company posted earnings of $0.55 per share on $5.66 billion in revenue, compared to consensus estimate of $0.55 on $5.75 billion in revenue, respectively. In addition, Starbucks lowered its full-year net earnings per share target to a range of $1.96 to $1.97 from a previously lowered forecast of $2.06 to $2.10, following a deceleration in U.S. same-store sales that has continued into July.