Amazon Q3 Profit And Revenue Miss Street, Outlook Below View; Shares Slip Over 4%

amazon2 28oct21

Shares of Amazon.com Inc. (AMZN) slipped over 4% in extended trading session on Thursday after the online retail giant's third-quarter profit and revenues missed Wall Street's estimates. The company also issued a weak outlook for the holiday-season quarter.

Seattle, Washington-based Amazon's third-quarter profit halved to $3.16 billion or $6.12 per share from $6.33 billion or $12.37 per share last year. On average, 39 analysts polled by Thomson Reuters expected earnings of $8.92 per share for the quarter.

Amazon's sales for the quarter jumped 15% to $110.81 billion from $96.15 billion last year. Analysts had a consensus revenue estimate of $111.60 billion for the quarter.

Sales from North America gained 10% to $65.56 billion from $59.37 billion last year, while international sales rose 16% to $29.15 billion from $25.17 billion. Meanwhile, revenues of Amazon Web Services, Amazon's cloud service division, jumped 39 percent to $16.11 billion from $11.60 billion.

In the past few quarters, the online retail giant had reaped benefits of the COVID-19 pandemic as more and more customers preferred to shop on its e-commerce platform. However, post-pandemic sales at brick-and-mortar stores have returned to normalcy as more and more people are getting vaccinated. This has affected Amazon's online sales.

Looking forward to the fourth quarter, the company expects sales of $130.0 billion to $140.0 billion. Analysts currently estimate revenues of $142.05 billion.

Amazon CEO Andy Jassy said the company expects incur "several billion dollars" of additional costs in its consumer business during the fourth quarter due to labor shortages, higher wage costs, global supply chain issues and increased freight and shipping costs.

"All while doing whatever it takes to minimize the impact on customers and selling partners this holiday season. It'll be expensive for us in the short term, but it's the right prioritization for our customers and partners," Jassy added.

The company expects fourth-quarter operating income to be between $0 and $3.0 billion, compared with $6.9 billion in fourth quarter 2020.

AMZN closed Thursday's trading at $3,446.57, up $54.08 or 1.59%, on the Nasdaq. The stock, however, slipped $144.35 or 4.19% in the after-hours trading.

For comments and feedback contact: editorial@rttnews.com

Business News

Follow RTT