Amazon shares dropped 9 per cent in after-hours trading on Thursday, wiping about $80 billion (€72 billion) from its market value after the ecommerce giant missed earnings estimates and offered conservative guidance for the holiday season quarter.
The Seattle, Washington-based group said third quarter operating income fell to $3.2 billion from $3.7 billion a year ago, as spending rose.
Jeff Bezos, chief executive, said Amazon was "ramping up to make our 25th holiday season the best ever for Prime customers," placing emphasis on its costly programme of one-day delivery.
“It’s a big investment, and it’s the right long-term decision for customers,” he added. “And although it’s counterintuitive, the fastest delivery speeds generate the least carbon emissions because these products ship from fulfilment centers very close to the customer – it simply becomes impractical to use air or long ground routes.”
Net sales
Net sales rose 24 per cent to $70 billion, beating the median analyst forecast for $68.8 billion, but net income dropped to $2.1 billion – or $4.23 per diluted share, versus forecasts of $4.62 in a Refinitiv survey.
Amazon partly blamed a $500 million “unfavourable impact” from foreign exchange rates.
Despite the optimistic sentiment, Amazon’s projected fourth quarter sales between $80 billion and $86.5 billion, versus Wall Street expectations of $87.4 billion. – Copyright The Financial Times Limited 2019
