Amazon.com Inc (NASDAQ:AMZN) will be the last of the FAANG companies to release results, with investors waiting to see if the company achieved its forecasted revenue in its fourth quarter performance.
Jeff Bezos’ company had targeted revenue of between US$130bn-US$140bn, which would represent a 12% growth on the same period last year.
The company is however expecting operating income to be less than US$3bn, considerably lower than the US$6.9bn it reported in the final quarter of 2020.
There is a belief among some analysts that performance may not be as positive as originally anticipated.
Peter Garnry, head of equity strategy at Saxo Bank highlighted that large investment into fulfilment centres and logistical operations has eaten into free cash flow, causing it to fall by around US$2-3bn in the last year.
He also expects “revenue growth to decline to 9.8% year-on-year” as well as being down from 15.3% in the third quarter as pandemic tailwinds are fading.
The performance of FAANG companies over the last few weeks may also be of concern to Amazon.
Alphabet Inc (NASDAQ:GOOG), previously Google, and Apple Inc (NASDAQ:AAPL) performed extremely well, while Meta Platforms Inc (NASDAQ:FB), formerly Facebook, and Netflix Inc (NASDAQ:NFLX) released results that sent shares tumbling.
Garnry notes that the two key things to look out for in tonight’s release is “guidance on revenue growth and operating margin,” with the latter “posing the biggest downside risk for the company due to rising input costs on wages and logistics.”