Chicago, IL – July 30, 2015– Zacks Equity Research highlights Amazon.com, Inc ( AMZN) as the Bull of the Day and DuPont (DD) as the Bear of the Day. In addition, Zacks Equity Research provides analysis onFacebook (FB), Google (GOOGL) and Whole Foods ( WFM). Here is a synopsis of all five stocks: Bull of the Day: Analysts loved Amazon’s blowout second quarter earnings and have raised their estimates significantly, sending the stock to a Zacks Rank #1 (Strong Buy).
Seattle, Washington-based Amazon.com, Inc ( AMZN) is one of the largest online retailers in the world, with extensive operations in North America, and strong expansion across the globe. The company was founded by Jeff Bezos in July 1995 and IPO’ed in May 1997.
The company reported its Q2 results on July 23. Net sales increased 20% to $23.18 billion from $19.34 billion in the same period last were up 27% from the second quarter 2014.
Net income came in at $92 million or $0.19 per share, compared with a net loss of $126 million, or $0.27 per share, in Q2 of 2014. Results were way better than the Zacks Consensus Estimate for a loss of $0.15 per share.
Gross margin increased 34.6% from 30.7% in the previous-year quarter, while operating cash flow increased 69% to $8.98 billion for the trailing twelve months, compared with $5.33 billion for the trailing twelve months ended June 30, 2014.
One area that particularly looks exciting to investors was Amazon’s cloud computing business, Amazon Web Services. The segment’s revenue increased 81% and operating income increased 407%. Obviously the segment will be a big contributor to earnings going forward.
For the third quarter, the management expected net sales to be between $23.3 billion and $25.5 billion and operating income (loss) to be between $(480) million and $70 million, compared to $(544) million in Q3 of 2014.
Amazon celebrated the Prime Day on July 15th, offering Prime members more deals than Black Friday. The event was a huge success with sales exceeding those on Black Friday 2014. The impact of Prime Day has boosted the outlook for the third quarter.
Following huge beat, shares were up almost 20% in early trading the next day, touching a record high of $580. With the share price surge, Amazon is now bigger than Wal-Mart, in terms of market capitalization. While the prices have since comes down slightly since then, the positive momentum is likely to continue going forward. Bear of the Day : Agricultural weakness and exchange rate headwinds have created a very challenging environment for DuPont, resulting in a second quarter miss and slashing of estimates by analysts. Delaware-based DuPont (DD) is a global science and technology company with product offerings in Agriculture, Electronics & Communications, Industrial Biosciences, Nutrition & Health, Performance Chemicals, Performance Materials and Safety & Protection.
DuPont reported it Q2 earnings on July 28. The company delivered adjusted earnings of $1.18 per share up slightly from $1.17 per share recorded in the same quarter a year ago but short of the Zacks Consensus Estimate of $1.19 per share. Results were hurt by a 17 cents per share unfavorable impact from foreign exchange and weakness in its agriculture business.
Net sales fell about 11% year over year to $8,595 million with declines across all segments. Sales were also short of the Zacks Consensus Estimate of $9,283 million.
Agricultural sales, which accounted for about 37% of total sales, were hurt by unfavorable currency impact and lower volumes from reduction in global corn planted area, lower soybean sales and reduced crop protection volumes.
DuPont reduced its earnings guidance for the full year due to concerns over weakness in the agricultural markets. They now expect full-year 2015 operating earnings to be about $3.10 per share, excluding $0.80 per share in previously anticipated full year earnings from Performance Chemicals. The company also lowered its dividend to $0.38 per share from $0.49 per share earlier. The miss, disappointing guidance and the dividend cut led to shares tumbling almost 7% in early trading. Additional content: Facebook Reports Q2 Earnings, Traders Sell News After the bell Wednesday, social media giant Facebook (FB) posted Q2 earnings and results were mixed on the top and bottom lines. Earnings of 30 cents per share (accounting for stock-based compensation and other before non-recurring items; the company's headline number was 50 cents per share) on quarterly sales of $4.04 billion compare to Zacks consensus estimates of 31 cents per share and $3.99 billion, respectively. Yet FB shares dropped 5 percent in the after-market following the Q2 announcement. (Since that time, FB shares are down only around 2 percent.) Aside from Q2 marking the third-straight one-penny miss on the earnings side, everything within the Facebook report looks solid: daily active users (DAU) reached 968 million (963 million was estimated), a 17 percent gain year over year. Monthly active users (MAU) hit 1.49 billion (we expected 1.478 billion), and mobile Facebook users now make up 76 percent of its users, up from 62 percent in the year-ago quarter. 65 percent of Facebook users access the site daily.
And the good news doesn't stop there: capital expenditures, one item analysts tended to cite as a concern going into the Q2 earnings report, was lower than expected at $549 million, down from the $702 million estimated. There simply isn't a lot at first glance of this report that would indicate a selloff in Facebook shares in late trading.
That said, the stock grew 13 percent over the past month, including a nice bump following Google's ( GOOGL) fine earnings report last week. Facebook shares prior to the earnings announcement were up 24 percent year-to-date. It is also the most expensive U.S. Internet stock on a price-to-sales basis. That said, Facebook's roughly 35x forward earnings is far from a nosebleed valuation. But perhaps the $100 per share mark is displaying something of a psychological barrier in the near term.
On the conference call, analysts and investors may have lots of questions regarding growth and monetization of Instagram, What'sApp? and Messenger. There wasn't a lot written on these businesses in the initial report.
Also posting Q2 earnings after the bell Wednesday was Whole Foods (WFM), and results there were not good. The high-end supermarket missed its earnings estimate of 45 cents per share by 2 cents, and revenues of $3.6 billion were short of expectations by about $70 million. Further, Q3 guidance of 34-35 cents was lower than the Zacks consensus of 39 cents, and comp store sales growth of 1.3 percent was way off from the 2.9 percent analysts had expected. This sent WFM shares plummeting 10 percent in late trading. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >> About the Bull and Bear of the Day Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months. About the Analyst Blog Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets. About Zacks Equity Research Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term. Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons. Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today. Find out What is happening in the stock market today on zacks.com.
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AMAZON.COM INC (AMZN): Free Stock Analysis Report
DU PONT (EI) DE (DD): Free Stock Analysis Report
FACEBOOK INC-A (FB): Free Stock Analysis Report
GOOGLE INC-CL A (GOOGL): Free Stock Analysis Report
WHOLE FOODS MKT (WFM): Free Stock Analysis Report
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