Amazon shares hit 52-week high ahead of earnings, Zappos purchase seen a positive
By APThursday, July 23, 2009
Amazon shares hit 52-week high
NEW YORK — Shares of Amazon.com Inc. jumped to a 52-week high Thursday ahead of the online retailer’s second-quarter earnings results and after the company agreed to buy online shoe store Zappos.com Inc. in a deal worth about $850 million.
Seattle-based Amazon’s shares rose $4.60, or 5.2 percent, to $93.39 in afternoon trading. Earlier, the stock hit a 52-week high of $94.40.
Deutsche Bank analyst Jeetil Patel said in a client note that, overall, e-commerce trends have stabilized in the second quarter. He added that Amazon’s continued growth should allow it to deliver gross margins above his estimate of 23.3 percent.
In all, analysts surveyed by Thomson Reuters expect the company to post a profit of 31 cents per share on sales of $4.69 billion for the quarter.
Patel said Amazon continues to gain market share from brick-and-mortar retailers, eBay and “and more importantly, its consumer and third party services (Prime and FBA) are driving nice gains in the business as well.”
Amazon Prime is the company’s membership-based two-day shipping program and FBA is its third-party shipping program, Fulfillment by Amazon.
Patel, who rates Amazon “Buy,” said while the company’s acquisition of Zappos “clearly spells a doubling up with its Endless shoe venture,” the deal will “certainly” help Amazon expand its position in the online shoe market, an underpenetrated category.
