Piper Jaffray Previews Amazon.com's (AMZN) Q2 Earnings

Piper Jaffray is out with a research report this morning previewing Amazon.com's (Nasdaq: AMZN) Q2 earnings, which are expected to be reported tomorrow, April 23. The firm has a Hold rating and $74 price target on Amazon.

The firm said it expects Amazon to report Q2 earnings that are in-line with its estimates of $4.003 billion in revs and $0.30 GAAP EPS. Piper's estimates are slightly below the Street's estimates of $4.08 billion in revs and $0.32 GAAP EPS.

Piper remains bullish on shares of Amazon over the long-term, but feels that the Company cannot sustain the same growth it experienced in 2007 given this year's weak economic environment. The firm cites recent negative data points from Google (Nasdaq: GOOG) and comScore (Nasdaq: SCOR) suggesting a definitive slowdown in eCommerce spending so far in 2008.

Piper believes investors should focus on several key factors when considering Amazon's Q2 earnings: "the macro-economic impact on Amazon's business, gross margins (given concerns over declining GM over the last two quarters), success of Amazon's web services, increasing third-party sales, traction with digital content initiatives, and planned investment levels."

For Amazon's North America segment, Piper expects the Company to report $1.203 billion in media sales and $767 million in Electronics and General Merchandise sales. For its International segment, Piper expects Amazon to report media sales of $1.34 billion and Electronics and General Merchandise sales of $594 million. Furthermore, Piper sees Amazon's gross margins falling from 23.8% last year to $23.1% during Q2.

Amazon.com, Inc. operates retail Web sites, as well as provides programs that enable third parties to sell their products on its Web sites in North America and internationally. [BCS]