Earnings preview: Can Amazon.com do it again?

In late April, Amazon.com (NASDAQ: AMZN) wowed Wall Street with first-quarter earnings that topped expectations. Its first-quarter profit increased 38%, while net income jumped to 115%. The following session, Amazon shares jumped more than 25% higher, and these gains have not been given back. In fact, the stock has continued higher since this bull gap, easily into territory not seen since early 2000.

At that time, the online retailing giant looked ahead to the second quarter, projecting revenue between $2.7 billion and $2.85 billion. Tonight after the close - fresh from a wild weekend of Harry Potter fulfillment - the company will issue its earnings for the second-quarter reporting period. Analysts are expecting per-share results between 16 and 17 cents per share, a notably improvement from year-ago earnings of a nickel per share.

So are expectations inflated ahead of tonight's earnings report? Sentiment indicators don't suggest so. For one thing, short interest is near a historical high. About 23% of the equity's available float for public trading is devoted to the short side.

Analysts are cautious as well; data from Zacks indicates that just five covering brokerage firms have named Amazon a "buy," leaving eight "holds" and four "sells," three of which are of the "strong" variety. From a contrarian perspective, this lack of love from Wall Street could be a good thing, as it suggests muted expectations ahead of Amazon's earnings report this evening. Another positive surprise may elicit an upgrade or two from this skeptical bunch.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.