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In 2010, Amazon.com ( AMZN ) had 26 fulfillment centers in North America. By 2017, it will have 88, according to Cowen analyst John Blackledge. In a research report Monday, Blackledge said Amazon’s rapid and massive delivery-system expansion — costing the company more than $10 billion in capital expenditures — is likely to continue for the foreseeable future and will not be matched by rivals such as Wal-Mart ( WMT ). Doubling down on the fulfillment business has meant continuing to innovate, especially in Amazon’s “sortation” centers, he says. These centers facilitate last-mile delivery — a notorious problem for any logistics company — and, in conjunction with increased United States Postal Service shipments, improvements here could drive down the cost of shipping to $1.85 per order from $4 to $5, the analyst says. Though spending big bucks has depressed earnings, generating ire among investors , the strategy is sticking close to the philosophy Jeff Bezos laid out in his 1997 letter to shareholders, that the company will put customers before profits. Amazon stock was up a fraction in afternoon trading on the stock market today , near 624. The company has an IBD Composite Rating of 77, where 99 is the highest. After a low-volume breakout, Amazon is still in buy range from a 603.34 cup-with-handle buy point. Amazon is an IBD Leaderboard stock. The company, meanwhile, also is expanding its FedEx ( FDX ) and UPS ( UPS )-like services. The company has acknowledged a widely circulated rumor that it was launching a fleet of jets — which it is leasing and operating out of Wilmington, Ohio. Blackledge says this program has the potential to make every Amazon item deliverable within a day. The e-commerce leader is set to report Q1 earnings after the close Thursday. Wedbush analyst Michael Pachter wrote in a research note last week that the company will miss EPS expectations but beat sales estimates. Scalper1 News
Scalper1 News