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Amazon shares fell more than 6% in extended trading on Thursday after the company reported its first shortfall in three years and gave weak guidance for the third quarter.
Here’s how the company did it:
- Earnings: $ 15.12 cons $ 12.30 per share, according to analysts polled by Refinitiv
- Income: $ 113.08 billion against $ 115.2 billion, according to analysts polled by Refinitiv
Amazon’s revenue increased 27% year-on-year to $ 113.08 billion. This is a significant slowdown from the second quarter of 2020, when sales climbed 41% year-on-year.
In a call with reporters, Amazon CFO Brian Olsavsky blamed the tough year-to-year comparisons on his business during the Covid-19 lockdowns. In mid-May of last year, Amazon saw its growth rates drop from 35 to 45 percent, he said.
“We’re starting to get past that and that’s why you see some of the growth rate going down,” Olsavsky said, adding that Amazon expects slower growth to continue over the next few quarters.
For the third quarter, Amazon said it expects sales of between $ 106 billion and $ 112 billion, up 10 to 16 percent from the same period last year. That’s well below consensus estimates of $ 119.2 billion.
The forecast echoes similar warnings from Facebook and Apple, which said in their quarterly results earlier this week that revenue growth rates would slow from pandemic highs.
Amazon said its third-quarter operating profit would be between $ 2.5 billion and $ 6 billion, a particularly large difference. This is still a drop from the $ 6.2 billion in costs incurred for measures such as coronavirus safety measures in the third quarter of 2020.
The June quarter reflects the last full quarter of Jeff Bezos’ tenure as CEO. On July 5, Bezos handed over the CEO position to Andy Jassy, who previously ran AWS. Bezos is now executive chairman. It is not known if Jassy will attend Amazon’s post-benefit conference call on Thursday night. Bezos has not participated in a results call since 2009.
In a statement, Jassy thanked Amazon employees for their work during the coronavirus pandemic and added, “I am very happy to work with you as we invent and build for the future.”
Amazon’s other mainstay of business, Amazon Web Services, grew revenue 37% in the second quarter, faster than 32% growth in the previous quarter. AWS revenue was $ 14.81 billion in the quarter, exceeding the $ 14.20 billion estimated by analysts.
Amazon’s workforce continues to grow. At the end of the third quarter, Amazon employed 1.33 million people worldwide, up 52% year on year.
An increase in delta variant cases of Covid-19 has prompted some Silicon Valley companies, including Facebook, Google, Uber and Twitter, to rethink their plans to return to the office and require vaccinations for employees or close offices again. Olsavsky told reporters that Amazon did not change its plans to return employees in September. The company will not require employees to be vaccinated, he said.
This story is developing. Check back for updates.
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