Amazon slides
Shares tank on revenue
Amazon shares plunged in extended trading Thursday after coming up short on revenue, despite nearly doubling analysts’ profit expectations.
Investors were also spooked by a weaker holiday season sales forecast, with Amazon projecting that revenue growth in its all-important fourth quarter would be the slowest in years.
The Seattle-based company’s shares dropped 9 percent, to $1,621.41, in late trading after third-quarter sales missed estimates and its forecasted sales and operating income fell short as well.
CEO Jeff Bezos, with the after-hours stock drop, saw his eye-watering net worth slump by nearly $13 billion, to $128.9 billion, this after a $8.2 billion hit on Wednesday.
While the Street was looking for $73.9 billion in net sales next quarter, Amazon projected a range of between $66.5 billion and $72.5 billion. It also expects operating income between $2.1 billion and $3.6 billion, well below the $3.87 billion that analysts expected.
Elsewhere, Amazon blew past earnings expectations, reporting $5.75 earnings per share — 86 percent higher than Wall Street’s prediction of $3.11 earnings per share.
Its net income grew by a factor of 10 year-over-year, from $256 million in 2017 to $2.9 billion in 2018.
It forecast that fourth-quarter sales will rise between 10 percent and 20 percent, or up to $72.5 billion. Analysts were expecting $73.9 billion.
Revenue from Amazon Web Services, the company’s fast-growing cloud services business, surged 45.7 percent to $6.68 billion, narrowly beating estimates of $6.67 billion.
In a statement to investors, Bezos touted the growth of Amazon Business, which offers purchasing solutions to businesses.
“Amazon Business has now reached a $10 billion annual sales run rate,” he said. “And we’re not slowing down.”
Total operating expenses surged 21.8 percent to $52.85 billion as the company invests heavily in its Prime program, grocery delivery from Whole Foods stores and the creation of original video content.