Welcome everyone. This is going to be a quick
reaction to Amazon earnings. I'm going to break them down.
We have all of the numbers here, before we jump into them and go
into the entire earnings report of Amazon.
I want to First say that this was a company.
I was particularly worried about a week ago.
They would just get sold off like a lot of other companies
after earnings. We saw it happen with Netflix.
We saw it happen with PayPal. We saw it happen with even
Facebook. Even big Tech was part of this,
this group of companies. As if they miss anything.
Any future expectations. Anything goes bad.
The company sells off like crazy.
Now, what is happening with Amazon?
Is the opposite of a sell-off? Here's what the stock looks like
right now it's up. 16% after hours now it was down 8% today
and I think that played into this, what happened was after
all these companies started selling off, there was a lot of
people predicting the Amazon would be the next just like me.
I thought it was the perfect. Up Amazon had a high P/E ratio,
Amazon faced all the inflation and Logistics issues more than
other big tech companies. You know, everything seemed the
perfect setup for company that would sell off.
I even did a poll on this. On my Twitter, I said Amazon
will go up after on. Earnings was one of the choices
fall after earnings and 67. Nearly 70% of people thought it
would fall after earnings, because that's what's been
happening with these companies, I discussed this.
On my Discord. I discussed do.
We sell half our position before hand going into this?
It seems like it's, you know, the risk reward seems so slanted
to the downside right now. The more I thought about it
though. The more people expected Amazon
to sell off, I began to think you have to reverse
expectations, Facebook, sold off, but nobody expected
Facebook to sell off, like literally, you know, I don't
know. Anybody that was really
predicting that what happened. Maybe there's a couple people
out there, but far and wide people were not expecting that.
Facebook sell off. Everyone was concerned and
worried about the Amazon sell off.
During the day, it's trading down 8% in one day even before
the numbers are out. So this seemed like a pretty
good setup for it to actually perform well.
And so I decided to hold my entire position instead of
trying to trim it or do any type of pre-emptive, you know,
timing, the market type of place.
I just held through it and it's going to trade up tomorrow.
Now, before we jump into the earnings as well, I'll quickly
show you the portfolio. We're back.
In the red today was a huge downed.
A 5% in the read. The graph looks really wonky.
Right now, we're getting these big swings in the market.
We swung up the past week, then we swung back down, we're down
in the red a little bit, so it's just going back and forth, like
crazy. I can't even keep up with the
portfolio. I look at it and just today,
Facebook's down. Five, or Netflix is down. 5.56%
cloud computing. Companies, software companies
are down 3.8%, Google's down, 3.6% Ali.
Baba's The only green company in the portfolio today.
Microsoft dropped almost 4%. Amazon was down.
Seven point, eight one percent before their earnings report.
And so on, and so forth. Spotify was down, sixteen
percent, that's a bigger holding of mine.
And then, of course, Facebook was down 26%. $400 chopped off a
Facebook, but this was a smaller holding.
I've actually taken a lot of gains of this one in the past.
So, even after today, I'm heavily in the green on, on a
Facebook, but that's what it looks like.
Overall. Portfolio is just as sporadic.
It's going up and down with the market like crazy.
It's incredibly volatile. Now, having said that, let's go
ahead and jump into the Amazon numbers.
Here, is the release from CNBC, I haven't looked at this before.
So this is my initial reaction. Let's go ahead and Jump Right
In. We have earnings per share $27.
That seems pretty high. Let's go ahead and look at what
they have been historically. So this is from quatrain sites.
You get access to this. If you join the patreon, we have
all their eps. Data from history, last quarter
was six dollars per share and then the quarter before that,
these really high ones are 15 bucks, 15 dollars of eps.
And the reporting what, what is this $27 $27?
When they were reporting $15 at their Peak.
So this chart is even going to look more funny.
These big spikes here are now going to be like the ones down
here. I mean, they really just
increase their earnings a ton. This stock deserves a spike with
this type of US gain in this is pretty shocking in my opinion,
Amazon seemed like a company that would have.
I felt like the report would be similar to a company like
Starbucks where they have overhead and employee issues and
kind of cost that they're figuring out and it's like a
temporary issue. I thought that would be the
report. Maybe it is, but this earnings
per share is crazy, is this number?
Correct $27.75. That doesn't, that doesn't seem
real revenue of 137 Billion dollars in 1/4, 137 billion
point for versus one thirty seven point six billion
expected. See this is the total opposite.
This is why you have to like inverse every emotion, right?
We didn't expect Facebook to sell off so that one's more
likely to sell off. We did expect Amazon to have
troubles and sell off. That's why this one's doing well
you have to reverse your expectations revenues was a
miss, everybody was expecting total revenues to be a Beat.
Debate on total revenues but to have an earnings Miss because of
overhead and expenses. That was the expectation.
We got the complete opposite Revenue slightly missed.
I'll be up just by a tiny bit. This isn't really that big of a
deal and earnings were crushed. Aw, s Revenue Seventeen point
three seven billion expected according to Street analyst.
So CNBC usually has this and they'll update the page.
So we'll see what it actually is.
Now we also have another report here.
Amazon reports, nine percent sales increase, that's a huge
increase. In the fourth quarter and big
profit gain on the ribbon steak. So this is probably why they had
these wild earnings, this earnings beat.
They made big on the, the Riven investment.
So I'm interested to know how much of the rivi instead.
A cake made up for this earnings per share because this is wild
twenty seven point seven. Five seems that just seems
incorrect. It's so high.
Let's go ahead and jump into their actual earnings report.
This is from the company itself, not from CNBC, I'm not going to
read through all of this. It's Pages long, but the
summaries on the top, this is where you get to the good stuff
right here. February 3rd, 2022.
We got the right one operating cash flow decreased 30% to forty
six point three billion for the trailing 12 months compared with
66 million. So it had a decrease in
operating cash flow, free cash, flow also decreased to an
outflow of 9.1 billion. This is the stuff I expected to
hear lots of decreases and overhead.
Where did they get this? Earnings free cash flow less.
Principal repayment of Finance leases Finance obligation to
crease to an outflow of twenty point four billion free cash
flow less equipment, finances, leasing principal repayments of
all Finance. Leases financing obligations is
a lot, a lot of stuff to include their decreased to an outflow of
fourteen point three billion, common shares outstanding plus
shares underlying stock based rewards totaled. 523 million for
December 31st compared with 500. 18 million one year ago so we
can look at the history here with their shares.
This is what it looks like they're doing dilution Amazon is
a company that's doing dilution right now but it's not really
enough to make or break an investment with it.
I wouldn't consider a company that's you know, destroying
sure. He'll shareholder value with
dilution. They're just issuing some
shares. I think like the outline hair
basically for stock-based rewards.
So that's how they're paying their employees.
So either they pay them with stock which incentivizes them to
hang around. At Amazon instead of going to
Apple and, you know, Facebook and competitors.
This keeps their employees at the company.
So it's a good expense for the shareholder.
Here's where you get to the good stuff.
Net sales increased 9% to a hundred and thirty seven point
four billion in the fourth quarter.
With a compared to one twenty five billion Company's top line
scrolling. They say, operating income
decreased 3.5 billion in the fourth quarter.
Compared with six point, nine billion.
In the fourth quarter. So the operating income actually
decreased quite a bit about got chopped in half there.
Then net income. This is a part that's wild.
Look at this, the net income increased fourteen point three
billion in the fourth quarter to twenty seven point seven, five
per diluted share compared with 7 billion or $14 per share.
Diluted the same quarter last year.
So fourteen point three billion, net income.
In the fourth quarter. Let's go ahead and look at
cultural insights again to look at the net income here.
Let's put this in context. This is this is a Amazon's net
income. It was three point, one six
billion last quarter, seven point seven billion 8.1 1
billion 7.22 billion going back. Six point three, three billion.
So the highest quarter of net income.
They've had so far in their entire history.
Is this one the the first For of 2021 which was 8.1 billion.
Now they're going to have a quarter with 14 billion and net
income. So this chart is literally going
to be doubled from 8 to 14 just about increased by 80%.
That is a going to be an enormous spike in this chart.
It will make all these numbers look so much smaller.
This is just incredible. I really think that the net
income alone the earnings beat. It's got to be the reason.
This is up, 12%, 13%. And now granted keep in mind, it
was down 8% today. So you get the 8, you know, the
15% split in half around, it's about up 8% today.
So it's doing really good Amazon hung in there.
I'm glad I didn't get psyched out and sell the stock.
This is why you literally cannot time the stock market.
You think you can Zig and zag it?
It's very difficult to do, invest in good companies.
Hold them long term, sometimes they'll surprise you, so they
continue on full year of 2021. The sales increased 22% Pretty
good growth for a company 22% almost 500 billion, almost half
a trillion in Revenue in one year, that's pretty phenomenal.
Compared with three eighty sixty or before then they say
operating income increased to twenty four point nine billion
and the year. So, even while all this stuff
decreased, this last quarter over the full year, which you
have to give Amazon at most the metrics are moving in the right
direction. Net income increased thirty
three point, four billion or sixty four point eight one per
day. Diluted share compared with net
income of twenty one point three billion so they're increasing
their net income like crazy. These numbers are just wild.
They almost seem like fake like made up but they're not.
This is Amazon. We also have some other news is
just fresh just a minute ago, Amazon increases the price of
prime nearly 17% to 139 dollars a year.
This is Amazon, they have pricing power, they're showing
it hair. They're probably going to grow
the amount of Prime members while increasing The price, the
17 percent. And a lot of people are gonna be
upset. People say they cancel, most
people are not going to cancel. Amazon Prime offers too much
value, just with the shipping and the video and the music and
everything else that they add to it.
So I think this price increases normal, they're going to do just
fine with it. Other big news and something
that I think a lot of investors pay attention to AWS is much
bigger than any other Cloud offering like Azure and Google
cloud and the growth Serrated this quarter, normally when
things get bigger, you think you apply these discounted cash
flows and models of decelerate and growth over time.
The law of big numbers, right? This isn't happening here,
Amazon is getting bigger. AWS is getting bigger, and
growth is accelerating, here's what they they say with it.
The AWS business generated 17.7 eight billion dollars in Revenue
in the quarter. According to the statement that
works out to a 39. .5 year-over-year increase 39.5
surrounded up to 40%, right? Give or take 40 percent growth
on a business that's been around for over a decade.
AWS is incredible. Azure is growing the fastest,
right? That's the kind of like the
biggest fastest growing one and that one's at what is it?
49% 46% barely above what AWS is the cloud business in and of
itself is a reason to invest in Amazon.
Forget about all the retail stuff, Amazon Prime, everything
else with a company. This is enough of a sales pitch
to own this investment for the next 10 years.
It's growing 39.5%. Even at its old age and its
massive size, the Amazon AWS is just incredible.
So from this report, it makes sense that right now.
Amazon, look at this, it's going up even more up, almost 17
percent after hours to 3,300 dollars, a share.
So, wow, did Amazon fill in that Gap?
Three thousand dollars pretty quick.
And this stock is only headed higher, pretty incredible to see
phenomenal report from Amazon. And just a quick shout out
before I end this video, shout out to anyone that held Snapchat
throughout this crazy week, it's up. 55%, after hours now, 55%
they blew away their earnings estimate.
Facebook seem to have some unique issues that I'll be
addressing later. What's going on with Facebook
and more detail. But Snapchat is having a very
good day today, crazy to see. See, but that's all for.
Now, if you want to see a more detailed follow up on Amazon
after have time to really dissect their earnings report,
listen, and listen to their calls break down things, like
how much of this massive earnings per share?
Be is due to the rivi ingane, 's stuff like that.
Subscribe to the channel. I'll have more content out
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the next one.