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Amazon (AMZN - Free Report) is scheduled to report first-quarter 2023 results on Apr 27.

For the first quarter, the company expects net sales between $121 billion and $126 billion. Net sales are expected to grow 4-8% from the year-ago quarter’s reported figure.

The Zacks Consensus Estimate for net sales is pegged at $124.77 billion, indicating growth of 7.1% from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for first-quarter earnings is pegged at 21 cents per share, which remains flat compared with the year-ago quarter’s reported figure. The figure has moved 16% downward over the past seven days.

Earnings surpassed the Zacks Consensus Estimate in one of the trailing four quarters and missed the same thrice, the average negative surprise being 13.5%.
 

Amazon.com, Inc. Price and EPS Surprise

Amazon.com, Inc. price-eps-surprise | Amazon.com, Inc. Quote
 

Prime, Retail & Streaming Momentum to Note

A slowdown in online shopping activities, foreign-currency headwinds, elevated staffing costs, and supply-chain disruptions are likely to have been concerning.

Growing inflationary pressure on fuel, energy, and transportation costs might have negatively impacted AMZN’s first-quarter performance.

Yet, Amazon’s strengthening distribution network and Prime-enabled fast delivery and grocery services are expected to have aided the performance of its e-commerce business in the to-be-reported quarter.

Prime benefits, which include a strong loyalty system, customer-friendly offers, quick grocery delivery services, and robust Prime Free One-Day and Prime Free Same-Day Delivery services, are expected to have aided Amazon’s customer momentum in the quarter under review.

In the first quarter, the company made a previously launched Prime benefit, “Buy with Prime,” widely available to U.S.-based merchants. Buy with Prime allows Prime members in the United States to shop directly from merchants’ online stores and avail of fast and free delivery service, a smooth checkout experience, and easy returns. This is expected to have encouraged Prime subscriptions.

Apart from these, the company’s aggressive stance on the core retail industry, especially grocery retail, is expected to have benefited the quarterly performance.

The company’s strengthening e-commerce business worldwide, along with the expanding global footprint of Prime, are expected to have contributed well.

The growing momentum of its cashier-less technology might have been positive. Rapid deployment of its palm scanner payment technology, Amazon One, is likely to have benefited the company during the to-be-reported quarter.

This apart, strengthening relationships with third-party sellers on the back of strong solution offerings might have aided growth in third-party seller services sales.

Coming to streaming services, a solid momentum across Prime Video is expected to have been a major tailwind in the soon-to-be-reported quarter. Expanding original content, regional content, and the overall content portfolio on Prime Video are expected to have driven the Prime subscription in the first quarter.

Gains from the growing momentum across Amazon Music are expected to get reflected in the company’s first-quarter results.
 

AWS Portfolio Momentum to Consider

The company’s expanding Amazon Web Services (AWS) portfolio is expected to have benefited first-quarter performance.

In the said period, the company made a fully managed service called AWS Telco Network Builder generally available. This service automates the deployment and management of telco networks on AWS.

With this service, AWS is likely to have gained momentum among communications service providers during the quarter under review.

This apart, the company’s increasing number of availability zones and regions is also expected to have continued acting as a major tailwind.
 

Smart Device Portfolio Strength

Amazon’s robust portfolio of Echo smart speakers is expected to have contributed well to its first-quarter performance.

Its strengthening portfolio of Fire devices is anticipated to have been beneficial. In the first quarter, the company unveiled three new sizes 43”, 50” and 55” in the Fire TV Omni QLED series. In addition, Amazon rolled out the Fire TV 2-Series, which offers both Fire TV and Alexa experience.

Strengthening Alexa features is likely to have aided Amazon in delivering a better user experience.

All these factors are expected to have aided the company’s quarterly performance.
 

Deepening Focus on Healthcare to Note

Amazon’s growing efforts toward bolstering its presence in the booming healthcare industry are expected to have aided its first-quarter performance.

The company completed its acquisition of One Medical in the to-be-reported quarter. This might have been positive. With One Medical’s in-office and 24/7 virtual care services, on-site labs, and programs for preventive care, chronic care management, common illnesses, and mental health concerns, Amazon is expected to have delivered an enhanced healthcare experience.

In addition, the company introduced a new Prime membership benefit from Amazon Pharmacy called RxPass, which provides seamless access to commonly prescribed generic medications at only $5 per month.
 

What Our Model Says

Our proven model predicts an earnings beat for Amazon this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. That is the case here as you see below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Amazon has an Earnings ESP of +20.82% and a Zacks Rank #3 at present.

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