Amazon Expected To Lose $0.74/Share In Q3: What Else Do Investors Need To Look Out For?

Amazon.com, Inc. (NASDAQ: AMZN) is scheduled to report its third quarter results after market close on Thursday. The consensus estimate is calling for Amazon to report a loss of $0.74 per share on $20.84 billion of revenue.

Investors will focus closely on Amazon's results following Alibaba Group Holding Ltd's IPO and demonstration that an e-commerce company of vast size could be profitable.

Amazon reported its second quarter results on July 24. At the time, the company lost $0.27 per share, $0.12 worse than expected. Revenue of $19.34 billion was $20 million more than expected.

Amazon issued third quarter guidance during its second quarter results. The company said it expects its third quarter revenue to be $19.7 billion to $21.5 billion. Operating loss is expected to be $410 million to $810 million.

Shares of Amazon tumbled nearly 10 percent after its disappointing second quarter results and uninspiring third quarter guidance.

ChannelAdvisor reported that Amazon saw a 40.4 percent year-over-year increase in its July same-store sales, a 45.1 percent rise in August same-store sales, but September same-store sales cooled down, rising 37.9 percent.

What Else To Look Out For?

Amazon obtained a $2 billion credit facility in early September with an initial term of two years and can be extended for up to three additional one-year terms. With roughly $8 billion in cash and short-term investments sitting on the company's balance sheets at the end of the quarter (and $3.1 billion in debt), investors may hope for further commentary by management.

Analysts at Bernstein did speculate that Amazon will spend over $2.5 billion on streaming license rights in 2015, a sharp increase from an estimated $1.5 billion to $2 billion it spend in 2014. However, investors will likely prefer an update from management over its credit facility.

Amazon hired 80,000 seasonal workers for the holiday season. The move is consistent with the National Retail Forecast stating that holiday sales will increase by 4.1 percent this year. Any commentary and guidance Amazon offers will be closely evaluated to assess its competitive positioning.

Amazon acquired Twitch for $970 million in cash in August. Stephen Ju of Credit Suisse commented in a note to clients on August 25 that the acquisition "lies outside the boundaries of what investors may be accustomed to seeing from Amazon." The analyst does add that the acquisition makes sense when coupled with Kindle, but investors will likely require further commentary from management over its true aspirations and long-term ambitions in the space.