Despite record profits, Amazon shares sink on disappointing sales

Amazon sinks as revenue growth disappoints

Amazon sinks as revenue growth disappoints

Amazon on Thursday reported third-quarter earnings that were more than $2 a share better than analysts had forecast.

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 says it had operating income of $3.7 billion during its latest third quarter; in comparison, its third quarter in 2017 had an operating income of $347 million.

The fall in shares, if replicated when U.S. stock markets open officially, would knock almost $90 billion off Amazon's market value and relegate it behind Microsoft and Apple in terms of market value.

"Alphabet is the ad revenue king, so any softness makes people nervous", said independent technology analyst Rob Enderle.

It will cost Amazon an extra $333 million to fund its higher salaries during the fourth quarter, according to Cowen, a financial research company. The company on Thursday also gave a disappointing revenue and profit forecast for the busy holiday period.

In similar fashion, Goldman Sachs analyst Heath Terry reiterated his Buy rating for Amazon, saying he is still optimistic the company is in the early innings of several big markets.

Q3 earnings per share: $5.75.

Devitt noted, "Our 3Q:18 topline estimate of $57.1B is in line with consensus expectations and near the high-end of the guided range ($54.0B- $57.5B)".

Floods raid Dead Sea school, rescue team search for missing students
The private-school students and their adult chaperones were touring near the Dead Sea when the floods carried them away. A civil defence official was quoted on state television as saying that the number of casualties was expected to rise.

Q4 revenue (forecast): Between $66.5 billion and $US72.5 billion.

Amazon also is investing in physical stores and the pharmacy business.

Global net sales came to $15.55 billion, up 13 percent, with an operating loss of $494 385 million.

However, on Thursday night it said operating profits in the coming quarter could be as low as $2.1bn, flat with previous year.

Revenue gained 29 per cent to $56.6 billion in the third quarter. The company continues to increase wallet share with existing cloud customers, and acquisition remains strong evidenced by Amazon's healthy pipeline of new enterprise clients.

The company now groups its advertising group under "other" on its balance sheet. 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. Its "other" revenue, which largely comprises advertising sales, jumped 122% to $2.5 billion.

Amazon has already committed to invest at least $5 billion in India, and is expected to commit even more investments towards India, where it is now locked in a bruising market share battle against local rival and Walmart-backed Flipkart.

Recommended News

  • Saudi says Turkish probe shows Khashoggi murder 'premeditated'

    Saudi says Turkish probe shows Khashoggi murder 'premeditated'

    British Prime Minister Theresa May said its Saudi arms sales were "under review", a stance similar to that expressed by Australia. The state-run Saudi Press Agency says Saudi prosecutors are calling the killing of Jamal Khashoggi a premeditated crime.
    More than 20 injured as escalator 'collapses' at metro station

    More than 20 injured as escalator 'collapses' at metro station

    Mobile phone footage of the incident shows dozens of people hurtling to the bottom and rushing to get out of the way. The station has been closed and emergency services are on scene, where injured fans are being stretchered to safety.
    No Mega Millions victor ; jackpot climbs to $1.6 billion

    No Mega Millions victor ; jackpot climbs to $1.6 billion

    In 2016, a $1.58 billion Powerball prize was split three ways by ticket holders from California, Florida and Tennessee. Finks said there tends to be a strong uptick in ticket sales once the jackpot crosses the $400 million threshold.
  • Ruben Loftus-Cheek happy with competition at Maurizio Sarri's Chelsea

    Ruben Loftus-Cheek happy with competition at Maurizio Sarri's Chelsea

    However, the Italian did reveal that Chelsea are hoping to have him available to face Burnley in the Premier League on Sunday. It's a little problem and I don't know how to solve it", he added.
    Searchers find nothing as hunt for missing girl continues

    Searchers find nothing as hunt for missing girl continues

    Police have revealed that Denise's phone was used to call officers around the time the murders and kidnapping took place. An Amber Alert was issued for Jayme, who was described as a sweet and shy girl involved in dance and cross country.
    Saudi official provides yet another version of Khashoggi's death

    Saudi official provides yet another version of Khashoggi's death

    In an interview with the Washington Post , Trump said that "obviously there's been deception, and there's been lies". He adds Saudi officials do not know the whereabouts of Khashoggi's remains.
  • Windies salvage tie to dampen 10000-club Kohli's day

    Windies salvage tie to dampen 10000-club Kohli's day

    Hope, who registered his second ODI ton, kept chipping away despite some tight bowling by the Indian pacemen and Holder´s run out. The West Indies spinners, especially senior pro Devendra Bishoo, could not deliver on a pitch that offered turn and played slow.
    Los Angeles Lakers Report Card: Game 4 vs. Phoenix Suns

    Los Angeles Lakers Report Card: Game 4 vs. Phoenix Suns

    Luckily, however, the Suns' other star - Deandre Ayton - played great and finished with a 22-point, 11-rebound double-double. Nikola Jokic scored 24 points for the Nuggets, who were off to their best start since the 2009-10 season.
    Canada says it is prepared to freeze Saudi arms deal if necessary

    Canada says it is prepared to freeze Saudi arms deal if necessary

    Turkey is pursuing the case, Erdogan said, as both a "representative of humanity's shared conscience and also for its sovereign rights".
  • Jordan Henderson, Keita to miss Liverpool v Red Star

    Jordan Henderson, Keita to miss Liverpool v Red Star

    Liverpool are now second in their Champions League group despite being level on points with Paris Saint-Germain in Group C. But I wasn't in any doubt that he would score again because he's such a good player".
    I agree with President Obama 100%!

    I agree with President Obama 100%!

    On Tuesday, President Trump stated he agreed with then-Senator Obama's assessment of illegal immigration into the United States . In his final debate with Hillary Clinton in 2016, Trump said, "President Obama has moved millions of people out".
    Voting access a focus of Georgia debate

    Voting access a focus of Georgia debate

    The Republican Governors Association slammed Abrams for her criticism of the free market, saying she's " too extreme for Georgia ".

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.