One aspect of a company becoming public or selling its shares is it has to share its overall data with the general public. Within the general public will be analysts looking at the past and trying to forecast what will happen if the company continues along the path it and every year it seems easier to forecast. During earnings season, the analysts will get it right 99% of the time. For the largest companies, there will greater scrutiny, an example is Amazon.

In an article by Arriana Mclymore of Reuters, the expectations of Amazon was written about. Amazon has a number of business units, although its e-commerce division is what the public knows most about the company. The company also generates income through cloud services, ad revenue and because of its size signals the health of the American consumer, which helps when 2/3 of the economy is based on the consumer spending money.

The cloud services is called Amazon Web Services (AWS) and is the most profitable division of Amazon. For a number of years, it had the largest market share and investors want to compare it to Microsoft and Google’s growing web services. In the first quarter, Amazon’s CFO Brian Olsavsky said there was pullback in growth of AWS because its enterprise customers were being cautious in their spending.

Amazon sells lots of ads, along with the Big Tech companies, Google reported a 3.3% increase to $58.1 billion, ad sales at You Tube was $9.51 billion. Estimates are $10.3 billion for Amazon.

Prime Day sales are the core of Amazon shoppers, Amazon delivered more than 1.8 billion units the same or next day, which is 4 times faster than in 2019. Doug Herrington, Amazon chief executive of worldwide stores, said that creating a regional fulfilment network, placing products closer to shoppers and expanding its same day delivery have reduced costs for consumers and the company.

Amazon’s profit margin was 46.77%, but analysts expect 46.53%.

Amazon is increasing the number of 3rd party sellers on its platform. Vendors can purchase ad space in search results and use other tool’s to catch customers’ attention in an ocean of products.

Linking to dividend paying stocks, when you buy these types of companies one of the very good assurances you have is the companies have a long history of making profits and coming in around the estimates that Wall Street believes it will be. There are many people examining the future of the company and as long it executes, then the estimates tend to be correct. When they are not correct, if they are worse, it is time to find alternatives; if they are better then capital gains are coming.

There are more questions than answers, till the next time – to raising questions.