Lumen (LUMN) Q4 Earnings and Revenues Top Estimates

Amazon AMZN is scheduled to report fourth-quarter 2024 results on Feb. 6.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

For the fourth quarter, the company expects net sales between $181.5 billion and $188.5 billion. Net sales are expected to grow 7-11% from the year-ago quarter’s reported figure. This guidance anticipates an unfavorable impact of approximately 10 basis points from foreign exchange rates.

The Zacks Consensus Estimate for net sales is pegged at $187.28 billion, indicating growth of 10.19% from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $1.52 per share, which indicates a jump of 50.5% from the year-ago quarter. The figure has moved north by 1.3% over the past 30 days.

The company has been benefiting from its dominant position in the e-commerce and cloud markets. It is also riding on strengthening generative AI capabilities.

AMZN’s Earnings Surprise History

Amazon has an impressive earnings surprise history. In the last reported quarter, the company delivered an earnings surprise of 25.44%. The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 25.85%.

Amazon.com, Inc. Price and EPS Surprise

Amazon.com, Inc. price-eps-surprise | Amazon.com, Inc. Quote

Earnings Whispers

Our proven model predicts an earnings beat for Amazon this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

AMZN has an Earnings ESP of +4.78% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Key Factors to Drive Amazon’s Q4 Results

Prime Ecosystem Leads Multi-Channel Expansion

In the fourth quarter, Amazon's growth trajectory is expected to have been anchored by its comprehensive Prime ecosystem, which continues to evolve across multiple revenue streams. The e-commerce giant's robust delivery infrastructure, particularly its Prime Free One Day and Prime Free Same-Day Delivery services, remains a cornerstone of its retail dominance, setting new standards for consumer convenience.

The company's strategic expansion in the grocery sector, coupled with its strengthening distribution network, has positioned it favorably in the competitive retail landscape. This growth is further amplified by Amazon's global e-commerce operations and the international expansion of Prime membership benefits. A notable development is the company's Buy with Prime facility, which is available on Belkin.com, offering U.S. Prime members fast, free delivery, easy returns and seamless checkout.

Physical retail operations are expected to show healthy growth, with consensus estimates projecting physical store sales of $5.43 billion, representing a 5.5% year-over-year increase. The integration of advanced technology, such as the Amazon Dash Cart, into its brick-and-mortar locations demonstrates the company's commitment to enhancing in-store shopping experiences. Additionally, the expansion of Amazon Fresh grocery stores, Whole Foods locations and Amazon Go outlets continues to strengthen the company's omnichannel presence.

Third-party seller partnerships remain a significant growth driver, with consensus estimates for sales pegged at $45.67 billion, indicating a 4.9% increase from the previous year. The streaming segment, led by Prime Video, continues to gain momentum through expanded original content offerings and portfolio diversification. The addition of ad-free Amazon Music as part of Prime membership further enhances the subscription's value proposition.

Amazon announced the exclusive premier launch of a true crime documentary, ChiefsAholic: A Wolf in Chief’s Clothing, on Prime Video on Dec. 24 in more than 240 countries and territories globally. These combined initiatives are expected to positively impact subscription revenues, with the consensus estimate forecasting subscription service sales of $12.15 billion, indicating 15.9% growth compared to the previous year. This comprehensive ecosystem approach, integrating retail, healthcare, entertainment, and digital services under the Prime umbrella, appears to be effectively driving Amazon's continued market expansion and revenue growth.

AWS Boosts AI Innovation and Infrastructure Expansion

Amazon Web Services (“AWS”) has been strengthening its market position through strategic investments in generative AI and infrastructure expansion. In the quarter under review, BBVA partnered with AWS to migrate its global data platform, ADA, to the cloud.

A notable development is that AWS Marketplace now includes Colombian vendors, enabling them to sell software and data globally. With more than 20,000 listings, vendors can offer SaaS, Containers and AMIs with flexible pricing. AWS announced a $1 billion six-year partnership with e& to provide cloud solutions that meet industry regulations that abide by and provide secure and scalable infrastructure.

The cloud segment's growth has been driven by the successful adoption of Amazon Bedrock, marking a significant advancement in generative AI capabilities. In the quarter under review, Lee Enterprises LEE chose AWS as its Preferred Cloud Provider to modernize its cloud infrastructure and develop generative AI platforms. Using Amazon Bedrock, Redshift and Nova models, Lee will deliver personalized news, improve advertising and gain data insights.

The expansion of AWS' global footprint through additional regions and availability zones enhances its service accessibility and reliability. These strategic initiatives are reflected in the Zacks Consensus Estimate for AWS sales of $28.33 billion, implying a substantial 17.1% year-over-year increase.

The combination of cutting-edge AI technology and robust cloud infrastructure positioned AWS as a key driver of Amazon's overall growth momentum in the quarter under review. AWS announced a partnership with Lumen Technologies LUMN to strengthen the connectivity of data centers and optimize cloud network delivery for U.S. customers. AWS also partnered with Box BOX to empower businesses in order to build applications and enhance productivity by integrating GenAI.

Smart Device Portfolio Worth Considering

Amazon’s robust Fire products family, portfolio of Echo smart speakers, Blink smart security cameras and doorbells, and eero WiFi systems are expected to have benefited its financial performance in the fourth quarter.

Strengthening Alexa features are likely to have aided Amazon in delivering a better user experience, the impact of which is expected to be reflected in the upcoming results.

Price Performance & Valuation

Shares of Amazon have risen 40.3% in the past year, outperforming the broader Zacks Retail-Wholesale sector and the S&P 500 index’s appreciation of 31.8% and 22.9%, respectively.

AMZN Outperforms Sector

Now, let’s look at the value Amazon offers investors at current levels. AMZN is trading at a premium with a forward 12-month P/S of 3.5X compared with the Zacks Internet - Commerce industry’s 1.92X and higher than the median of 2.85X, reflecting a stretched valuation.

AMZN’s P/S F12M Ratio Depicts Stretched Valuation

Investment Thesis

Amazon presents a compelling investment thesis driven by dual growth engines. The core retail business demonstrates strong momentum through Prime ecosystem expansion, enhanced delivery capabilities and omnichannel optimization, while AWS maintains its cloud leadership through strategic AI integration and infrastructure scaling. The company's revenue diversification across e-commerce, cloud computing, digital streaming and healthcare services provides multiple growth vectors. With retail projecting steady growth in third-party sales and physical stores, alongside AWS' estimated 17.1% revenue growth, Amazon appears well-positioned to deliver sustained financial performance. The integration of generative AI across segments further strengthens its competitive moat and long-term growth potential.

Final Thoughts

Amazon’s near and long-term prospects are expected to benefit from strong retail strategies, which include bolstering its online and offline retail presence, distribution channels and delivery services. An expanding global presence and the growing adoption of Prime are other tailwinds. The growing footprint in the video streaming space with Prime Video is another positive. Amazon's strategic positioning in the enterprise AI market through Amazon Bedrock represents a compelling investment opportunity for 2025. Solid AWS momentum, coupled with a deepening focus on generative AI, is a plus. With enterprise AI adoption accelerating and Amazon's clear competitive advantages in this space, the stock appears well-positioned for appreciation in the coming year. For investors seeking exposure to the rapidly growing enterprise AI market, AMZN stock offers a combination of established market leadership and significant growth potential.

Zacks Investment Research

Kyndryl Holdings, Inc. (KD) came out with quarterly earnings of $0.51 per share, beating the Zacks Consensus Estimate of $0.40 per share. This compares to loss of $0.05 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 27.50%. A quarter ago, it was expected that this company would post a loss of $0.07 per share when it actually produced earnings of $0.01, delivering a surprise of 114.29%.

Over the last four quarters, the company has surpassed consensus EPS estimates four times.

Kyndryl Holdings, Inc., which belongs to the Zacks Technology Services industry, posted revenues of $3.74 billion for the quarter ended December 2024, missing the Zacks Consensus Estimate by 1.88%. This compares to year-ago revenues of $3.94 billion. The company has topped consensus revenue estimates two times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Kyndryl Holdings, Inc. Shares have added about 9.7% since the beginning of the year versus the S&P 500's gain of 2.7%.

What's Next for Kyndryl Holdings, Inc.

While Kyndryl Holdings, Inc. Has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Kyndryl Holdings, Inc. Unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #5 (Strong Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.57 on $3.89 billion in revenues for the coming quarter and $1.11 on $15.21 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Technology Services is currently in the top 35% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Another stock from the same industry, Cricut, Inc. (CRCT), has yet to report results for the quarter ended December 2024.

This company is expected to post quarterly earnings of $0.04 per share in its upcoming report, which represents a year-over-year change of -20%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

Cricut, Inc.'s revenues are expected to be $220.46 million, down 4.7% from the year-ago quarter.

Zacks Investment Research

Lumen Technologies, Inc LUMN is scheduled to report fourth-quarter 2024 results on Feb. 4.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

The Zacks Consensus Estimate for total revenues is pegged at $3.22 billion, indicating a fall of 8.4% from a year-ago reported number. The consensus estimate for earnings is currently pegged at a loss of 8 cents per share. In the year-ago quarter, LUMN reported earnings of 8 cents per share.

The company missed the Zacks Consensus Estimate in two of the last four quarters and beat in the remaining quarters. It delivered a trailing four-quarter earnings surprise of 80.98%, on average. In the past year, shares of LUMN have gained 309.9% compared with the sub-industry’s growth of 75%.