Amazon profits show sharp slowdown in e-commerce

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Amazon

shares fell late on Thursday after the e-commerce and cloud computing giant reported mixed results for the June quarter, with better-than-expected earnings but lower sales than Wall Street estimates.

The failure reflects an insufficiency in Amazon’s e-commerce business, which has suffered a sharp deceleration from recent growth trends. The slowdown in e-commerce was partially offset by better-than-expected results in the cloud computing, advertising and third-party vendor segments.

For the quarter, Amazon (ticker: AMZN) reported sales of $ 113.1 billion, up 27% from a year ago, or 24% after currency adjustment, in the midst of the company’s forecast range of $ 110 billion to $ 116 billion, and a little timid of the Wall Street consensus of $ 115.4 billion. Profit was $ 15.12 per share, ahead of analysts’ forecast of $ 12.28 per share. Operating profit was $ 7.7 billion, up the company’s target range of $ 4.5 billion to $ 8 billion, and just below the Wall Street consensus of $ 7.8 billion .

Online store revenues were $ 53.2 billion, up 16% from a year ago, or 13% currency-adjusted, well below consensus Street forecast of $ 57.3 billion. This was below growth of 41% in the March quarter and 49% a year ago.

Amazon CFO Brian Olsavsky said on a call with analysts that since May, the growth of the company, with the exception of Prime Day, has fallen in mid-teens, dropping from d ‘recent growth of 35% to 40% to 44% growth in March. trimester. The company sees growth for the September quarter in the 10-16% range.

Olsavsky pointed to greater vaccine availability and more consumers leaving the home as slowdowns, in addition to difficult comparisons to a year ago.

Olsavsky added that the company expects a “pattern of difficult compositions” to continue over the next few quarters until the company passes the pandemic period.

Third-party services revenue was $ 25.1 billion, up 38%, or 34% after currency adjustment, above consensus forecast of $ 24.8 billion. But it was nonetheless a slowdown from 60% in the March quarter and 53% a year ago.

Amazon Web Services, the company’s cloud business, reported revenue of $ 14.8 billion, up 37%, and well above Street’s estimate of $ 14.3 billion, after growing 32% in March and 29% a year ago.

“Other” revenue, mostly advertising, was $ 7.9 billion, up 87%, or 83% after currency adjustment, well ahead of the consensus at $ 7 billion, and in line with recent solid advertising data from

Facebook,

Alphabet and other advertising-oriented companies. Brick-and-mortar store revenue was $ 4.2 billion, up 11%, topping Street View at $ 3.9 billion.

Sales growth in North America, excluding currency effects, slowed to 21% in the quarter, from 39% in March and 44% a year ago. The operating margin in North America was 4.7%, down from 5.4% in March, but up from 3.9% a year ago. International sales increased 26%, compared to 50% in the March quarter and 41% in the previous year quarter.

For the September quarter, Amazon is forecasting sales of $ 106 billion to $ 112 billion, far from Street’s consensus of $ 118.6 billion, with operating income ranging from $ 2.5 billion to $ 6 billion, from $ 6 billion. , $ 2 billion a year ago. The company said forecasts predicted around $ 1 billion in costs related to Covid-19.

Amazon shares were down 7.1% at the end of the session. The stock is up 11% in 2021, behind the

S&P 500

‘s gain of 18%.

Write to Eric J. Savitz at [email protected]