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In the Amazon Q4 earnings, Bezos in the end for the "long-term profit" to build a number of road moat?

via:博客园     time:2017/2/5 12:02:32     readed:945

在亚马逊这份在亚马逊这份 Q4 财报上,贝索斯到底为“长期盈利”筑起了多少道护城河?

Amazon yesterday released the fourth quarter of 2016 earnings, may make you look a little bit, Bezos will this year's "letter to shareholders," written like.

Earnings seem to be no longer the focus of Wall Street's headache, but sales of $ 43.7 billion (revenue: 22%) unexpectedly did not meet analysts' expectations. And Bezos gives their own interpretation that is obvious - mdash; to blame the dollar too strong:

Despite being in the shopping season, but Amazon has been affected by foreign exchange rate losses of nearly 800 million US dollars. Without this loss, Amazon's revenue increase will certainly be more than 24%.

As a result, Amazon posted a 4% fall in after-hours trading, to $ 83.995 billion, despite a quarterly gain of $ 749 million, up 55.3% year-on-year. However, one thing can not be ignored:

Earlier in the shopping season before the arrival of the impact of strong income expectations, the Amazon stock price in the past month, the increase has already more than 10%.

In addition, for many years the rainy Amazon, and the previous quarterly losses due to frequently fell more than 10% compared to Wall Street's response is more like a "minor".

Now the Amazon, is not already in 2013 ~ 2015 half of the time in the loss of international electricity providers, but a comprehensive harvest, and has a strong "moat" diversified technology companies.

在亚马逊这份在亚马逊这份 Q4 财报上,贝索斯到底为“长期盈利”筑起了多少道护城河?

From Q2 2012 to 2015 Q3, Amazon is the most volatile level of profitability of a period. In the 13 quarter, seven quarters of a loss, of which three quarterly losses, over 100 million US dollars. But from the beginning of the third quarter of 2015, ushered in the outbreak period.

Cloud computing and things for the Amazon reinforcement of the "moat"

Buffett in 1993, the letter to the shareholders, the first proposed "how to define a high-quality enterprise" and "moat" theory:

The moat is a very sturdy "barrier" that can last for the castle host against the enemy. In other words, a truly great company needs to have the ability to operate with long-lasting and difficult to copy the "concession" to protect the objective return on investment.

From now on, Amazon in the "cloud computing business" achievements have been for their initial establishment of the second road "moat".

Needless to say, with the first three quarters of 2016, as in the fourth quarter, the most dazzling data is still derived from the "cloud computing services" (AWS) section.

This almost every year in Bezos "letter to the shareholders" in the business sector, from 5 years ago, "burn machine", and now grows to become the largest Amazon "blood bank" - & mdash ; "Operating profit is far more than the sum of" North American Retail Business "and" International Retail Business "(loss-making department):

  • Although North America's net sales were $ 26.24 billion and $ 13.96 billion, the operating profit for the two retail segments was $ 816 million, while the latter lost more than $ 400 million.

  • Compared with the retail industry, AWS profitability once again vividly demonstrated: Q4 net sales reached 3.536 billion US dollars, an increase of 47%. Among them, the operating profit reached 926 million US dollars, up 60% year on year.

This time, we can recall since 2012, when the quarterly profit reduction or loss of state, Bezos in the face of Wall Street questioned "out" reason: we in a certain area of ​​expenditure is really too Huge.

But confirmed the Amazon Q4 quarter of the relevant data will be able to know, Bezos is still in the "sprinkling money" on the road ahead: operating expenses rose 23%, up to 42.5 billion US dollars.

In this case, still a strong profit increase can only show - mdash; AWS investment value is indeed beyond people 's imagination.

在亚马逊这份在亚马逊这份 Q4 财报上,贝索斯到底为“长期盈利”筑起了多少道护城河?

AWS's climbing revenue began to stabilize, the picture from Quaitz

Although AWS revenue growth moderated slightly from 55% in the third quarter of 2016 (see chart above), it did not meet analysts' expectations (for the first time since 2015).

And Business Insider's analysts have reminded us that AWS and large enterprise customers usually sign a long-term orders for several years, which implies that Amazon has a large number is not placed in the "revenue" in the "advance" Income & rdquo ;.

For example, if you have just signed a $ 1,000 one-year contract, then only $ 250 will be recorded in the quarter's revenue, and the remaining $ 750 can only be put into the "advance receipts" and "rdquo; ; A column.

Therefore, you can see in the balance sheet of Q4 earnings in the Amazon's real money - 480 million in revenue in advance, more than the previous quarter, a full 600 million US dollars more. This is more than the performance of recent quarters to be alarming.

According to Deutsche Bank analyst forecasts, this very healthy growth is mainly due to the growing number of orders AWS. This seems to be predictable, the future AWS will have a long-term "profound knowledge" trend.

In addition, JP Morgan Chase analyst Ron Josey also believes that as the AWS in the fourth quarter experienced N times lower prices, so revenue growth is slippery excuse:

"In fact, the expectations given by the analyst has gone beyond the Amazon forward speed. In the cloud computing market competition, AWS revenue slowdown is a predictable result. This quarter should be considered as an adjustment to Amazon's future goals. & Rdquo;

In fact, Josey so-called "adjustment", largely refers to the development of AWS is not a good momentum of this sector, but on the Amazon core business - the future expectations of online retail calm judgment and thinking.

Especially in the beginning of the end of the year to let Wall Street excited shopping season, may no longer be the most important measure of Amazon's profitability standards.

在亚马逊这份在亚马逊这份 Q4 财报上,贝索斯到底为“长期盈利”筑起了多少道护城河?

And Apple and other consumer-oriented product sales company, the fourth quarter of each year is also the Amazon's "revelry."

The investment bank Aegis Capital analyst Vic Anthony also believes that Amazon early in the field of electronic business to establish the dominant position, many people will be preconceived ', its shopping season income has too high expectations:

"The same time period from the past point of view, Amazon's soaring stock prices will always allow Wall Street is too looking forward to the performance of the electricity industry." It's a bad time to bet on the annual shopping season. It's time to catch your breath. & Rdquo;

However, in this failed to make investors satisfied with the shopping season, there are still some small surprises, such as within three months to be embedded in more than 4,000 features Amazon home "trump card products" - & mdash; & mdash; Speaker Echo.

Q4 reported that this was injected into the intelligent voice assistant Alexa soul black speakers, creating a 9 times higher than the same period last year sales. To become the Amazon during this period the best-selling products on the site.

From a more comprehensive point of view, in addition to Echo, Amazon is also to artificial intelligence technology-based Alexa embedded in more and more physical products, such as the same good selling smart TV Fire TV, and then with other The company co-research and development of intelligent refrigerators and unmanned vehicles & hellip;

This attempt with the current layout of the Internet of Things Softbank and Google reached a consensus - mdash; hardware and hardware in some form to link up to form a core network of things to Alexa ecosystem of ecosystems.

Although the whole system is still not plump, but the results achieved are unusual. Darin Manney, head of investor relations at Amazon.com, also confirmed the positive impact of the attempt at the telephone earnings conference:

Amazon's business-like line of cell-breeding is creating a huge network effect for itself. At the same time, each business segment will benefit from each other, the common growth. & Rdquo;

Online retail (large data) + cloud computing + things. Multi-line, and have a good response, which means?

Once the power supplier brand as a single channel "moat" Amazon, now with AWS and the star of the blessing of things, the risk of defense capability is becoming more durable and powerful.

Amazon in the future of the retail highlights: Prime membership system

It is noteworthy that, AWS Q4 quarterly operating expenses increased by only about 700 million. This time, accounting for the bulk of the expenditure is the Amazon's retail business:

The report tells us that Amazon in the quarter will be 5.7 billion US dollars into the storage and logistics channel construction.

Of course, these spent a lot of manpower and resources of the infrastructure, the vast majority is to ensure that those who bought the $ 99 Prime Member package mail system users, can truly enjoy the Amazon exclusive, free and fast shopping experience.

Yes, has been this home appliance business to achieve the ultimate Prime membership system, is still the focus of Q4 earnings Bezos & ldquo; show off & rdquo; object. And Apple slightly slightly shortfall of earnings, Bezos each time can be saved by the financial report of Prime Prime "endorsement fee":

"2016, our Prime team still uphold the" customer first "principle. Up to now, members of the membership can choose from 50 million items of your favorite things (and received within two days of our package). This figure increased by 73% in 2015.

In addition, there are more than 200 countries and regions Prime members can watch our premium video channels Prime Video. We are also proud to add new content to our membership program, such as Prime Reading, Audible Channels for Prime, Twitch Prime, and more. In the past 1 year, there have been tens of millions of Prime users to join us! & Rdquo;

Who would have thought, as early as 2005, the analyst's eyes "on the line will mean a loss" of the Amazon Prime membership system, in 10 years for the home appliance business to bring more than 50 million subscribers with more than 50 subscriptions $ 100 million in revenue (based on an annual fee of $ 99).

In addition, Chicago consumer research firm Consumer Intelligence Research Partners market report also gives a positive signal: Prime membership subscription subscribers are expected in September 2017 exceeded 65 million mark.

Although the company does not disclose any member statistics, but Bezos has been in the earnings report does say: in 2016, there are already tens of millions of new users to join the Amazon Prime membership program.

In fact, Amazon's Prime membership in the use of business logic is not complicated:

With rapid, free distribution services to promote users under more orders, and then these subsidies to freight costs; the price of.

Facts have proved that this strategy is indeed effective, and there is a strong "network diffusion effect".

Therefore, Amazon's old rival Wal-Mart line finally in 2015, unable to bear, tested a called "ShippingPass" unlimited unlimited items: $ 49 per year, cheaper than Prime half. However, less than two years, the project was quietly cut off.

Also want to play "priority distribution to win over the user" signs? This idea has long been the best development opportunity.

In fact, people are currently in the Amazon to buy goods, has been extended from the physical goods, e-books, online music and video and other digital content, and as electricity providers, Amazon in this matter is equipped with the "send that is Of "the unique advantages.

In other words, with the Amazon will be more and more business package into the "Prime members can enjoy the privilege", the Prime has not only means that the priority distribution. These "added value" to bring its attraction is clearly beyond the Bezos imagination.

Remember the January 2015 global Golden Globe Awards for Amazon's original content production capabilities? (PS: this year's Amazon film will also impact the Oscar)

Despite the 300 million US dollars in 2014, video production costs burned, but the Amazon homemade drama "Transparent Life" is the first time to help its streaming video platform Prime Instant Video won the "Best Drama Award" and "Best TV Actor "two awards.

For Amazon, the significance of this award is not in fact "among the top content producers", but to attract more people to become a Prime program - Member exclusive services.

June 2016, another from the Royal Bank of Canada market analyst Mark Mahaney's findings are more indicative of the value of the Prime: 10% of Prime members are completely directed at the Amazon video content paid.

Can be seen, Bezos in early 2016 the phrase "16 films produced each year, will impact Oscar" rhetoric, in addition to means that Amazon will continue to burn, but also for the expansion of Prime membership system empire "to expand territory & Rdquo;

Q4 the biggest bright spot: We will spare no effort to continue to burn money

Yes, continue to burn money. This is the biggest bright spot in the Amazon Q4 earnings.

And "bragging" all the way to sing the revenue and profits compared to, we can find that Bezos prefer to play in the earnings report to investors in the next period of time the "small abacus":

We are to "gambling", we need a variety of attempts, we are more willing to put a long line to catch big fish.

In other words, in order for Wall Street to do "less than expected" mentally prepared, Amazon's earnings will always tell us that they will continue in the next quarter to honor the "buy buy" commitment:

First of all, Amazon expects the company in the next period of time will continue to "sacrifice profits", based on increased storage, film business and various types of hardware investment.

As a result, the Company's operating profit in the first quarter of 2017 will remain in the range of $ 250 million to $ 900 million. The profit margin for the same period last year, little to speak of growth (even if the company expects revenue in the quarter will grow 23%, reaching 3.58 billion US dollars).

This implies that Bezos will continue to expand the infrastructure to facilitate the freight turnover, and create more Prime membership-related original video content, and even at the smart home appliances Echo to invest a lot of R & D costs.

Amazon, for example, announced on Monday that it would build a large air cargo hub near Cincinnati, north of Kentucky, and even equip it with 40 Amazon Prime Air freighters.

Of course, this move is further proof of the online retail giant does intend to build a huge logistics network to challenge the United States two "most powerful" courier service UPS and FedEx.

Second, Amazon will create more than 100,000 official jobs for the United States over the next 18 months. Work related to education, technology, including a number of industries.

This move is in response to the call of Trump. Create valuable jobs, increase recruitment efforts, of course, means "spreading money".

Third, in 2017, Amazon will open more in the US Seattle - free checkout experience shop Amazon Go.

The new grocery store, which blew up a global network last month, could use computer vision, sensors and depth-of-learning technology to provide users with a new model of online shopping without queuing up. Well, "the future will have more than 2,000 entities in the US grocery store" & rdquo; commitment also need money to cash.

In addition, we can not ignore the Amazon in the international market development speed, for example, it is always the local power giant Flipkart beat the Indian market, and just 2016 Prime membership system introduced inland China.

Now, since Bezos and throw the old "long line" concept, Wade Bush's Michael Pachter Securities, said that only come up with that set of cliché the argument:

"This means that Amazon has in the new year, spared no effort to throw out a lot of money? of course! Every time Wall Street saw revenue, but profit is down, it is easy to be frightened. Because it will lead to negative leverage, the whole street people hate it. We just want to know, Bezos this year to shareholders that something. & Rdquo;

But in any case, the end is always such a situation:

Regardless of the shareholders began to criticize Bezos' s "lip service", or the future share price will certainly come out in the quarter after the plummeted, survived for 30 years but can not always rely on Amazon profits to please the market, its share price is still in the crash After continuing rapid rise.

This is probably the "operating profit into long-term prospects of the project to go, the company's long-term cash flow maximization as the goal" of the greatest significance.

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