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Amazon reports $56.6 billion revenue in Q3

27 October, 2018, 03:59 | Author: Lawrence Cooper
  • Amazon sinks as revenue growth disappoints

Google parent Alphabet Inc on Thursday missed analysts' quarterly revenue estimates for the first time in at least two years and reported continuing erosion of its operating margin, sending shares down nearly 7 percent after hours.

To be sure, Amazon shares (AMZN.O) dropped by the most in four years on Friday after its outlook for holiday season sales missed targets, fanning concerns that Wall Street's tech darlings are finally starting to face stronger competition, Reuters reported.

The company showed slowing revenue growth in all categories quarter over quarter, including online sales and subscription sales, Amazon Web Services sales and its fast-growing advertising business.

Heading into the print, Stifel analyst Scott Devitt has raised his near- and long-term revenue estimates for Amazon's retail, advertising, and AWS businesses and modestly increased his margin forecasts.

It will cost Amazon an extra $333 million to fund its higher salaries during the fourth quarter, according to Cowen, a financial research company.

But the company's revenue for the period was lower than expected, and it offered a disappointing revenue forecast for the fourth quarter.

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Our earlier story this week predicted Amazon's shares would begin to enter a bear market by falling 21% off their high, but Amazons' outlook has significantly deteriorated since then. Shares in Amazon were down 9 percent in premarket trading. In the third quarter past year, Amazon pulled in $US43.7 billion in sales.

Q4 earnings per share (forecast): Between $66.5 billion and $72.5 billion. "We're very happy not only in the strong membership numbers", Olsavsky said Thursday, "but also in the continued strength of engagement" of Prime's shipping benefits and Prime Video.

This healthy figure represents a 122% increase year over year and a jump of $301m from the last quarter, putting Amazon on track to hit the psychologically important $10bn a year mark in annualised sales for the sector.

However, on Thursday night it said operating profits in the coming quarter could be as low as $2.1bn, flat with a year ago. It purchased online pharmacy PillPack in June, which followed its US$13.7 billion acquisition of Whole Foods previous year to jump start its grocery business. That figure, which represents full-time and part-time workers but excludes contractors and temporary personnel, is up from 575,700 last quarter and 541,900 a year ago.

The logo of Amazon is seen at the company logistics centre in Boves, France, August 8, 2018.

The Dow Jones Industrial Average has shed more than 1,840 points - almost 7 percent - since October 3, even with Thursday's 401-point rebound.

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