Amazon low, Alphabet results raising concerns about growth

(Reuters) – Shares of Amazon.com Inc. (AMZN.O) fell to a four-year low on Friday, after their sales prospects for the holiday season failed to meet their targets.

Third quarter results mark the second year in a row that billionaire Jeff Bezos' group is not meeting its sales targets and, coupled with a similar disappointment from Google's owner, Alphabet (GOOGL.O), they sent a shockwave reverberating on the stock markets.

Wall Street analysts have not downgraded ratings and have almost unanimously supported companies' long-term prospects. However, several indicated that they seemed to indicate that the two companies were starting to face stiffer competition from their counterparts in the technology sector and the retail businesses that Amazon had suffered. last years.

The 9% drop in equities cost Amazon's market value more than $ 80 billion and has sidelined it behind Microsoft Corp.MSFT.O) and Apple Inc (AAPL.O) in terms of market value.

The Seattle-based company has now devoured retailers such as Borders, Sears and Toys "R" Us. It was facing greater challenges from multinationals investing hard in competition, DA Thomas Forte, Analyst. at Davidson & Co.

"Google, Microsoft and Walmart … are more difficult to kill," he said.

Alphabet's shares fell by about 6%, losing about $ 45 billion of their market value after a decline in sales after exceeding the estimates of the last eight quarters.

Revenue from Amazon's international operations, which accounted for 27.5% of total sales, was at the heart of the earnings deficit, with growth halved to 13.4% from the previous quarter.

"We do not see any real structural problems with Amazon, but almost every sector of the business is slowing down somewhat and we are generally seeing another deceleration in retail sales in the fourth quarter. So we have a hard time finding a catalyst, "said Ross Sandler, Barclays analyst.

Amazon was expecting sales to reach $ 72.5 billion in the Christmas quarter before Christmas, while analysts expected a peak of $ 73.9 billion, according to Refinitiv data.

Its expected operating profit of $ 2.1 billion to $ 3.6 billion was also lower than consensus estimates.

Several analysts have described the company's outlook as "conservative" and said that a possible decline in profits seemed highly unlikely.

"Overall, Amazon's growth trajectory remains strong, including advertising, groceries, pharmacy and retail, as well as Amazon Business ($ 10 billion in sales in eight countries). Amazon Web Services, "said analysts at the Telsey Advisory Group.

Shares of the company fell 9.0% to 1622 dollars in the morning.