TheStreet.com’s Marek Fuchs noted that coverage of Amazon.com’s earnings this week left something to be desired, as well-respected publications such as USA Today and the Wall Street Journal had different interpretations of what the numbers meant.
Fuchs wrote, “If you ever need a reminder of why you should struggle against the temptation to read only one article on an earnings report, get a load of how the following are at odds with each other. That’s what you get when the business media fail to be guided by how the numbers fit or contradict the company’s long-term strategy. Instead, immediate, opportunistic reactions by traders too often shape story lines about the quality of the numbers.
“USA Today highlighted the fact that Amazon’s net earnings plunged in its lead, then added that the fact that this still outpaced analysts’ anemic estimates drove the stock up 14% in after-hours trading.
“Revenue, too, it was soon added, beat expectations by a whisker, ‘consequently, Amazon shares shot up $4.72…’
“USA Today didn’t bother to mention what was probably the biggest short-term positive and long-term negative of the day: that Amazon will (finally) slow its rate of investment in new products.
“The Wall Street Journal hit on this essential factor in its subheadline and second sentence, giving it the credit it was due for the short-term movement of the stock price — far more credit that their thimble-sized beats of expectations deserved.”
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