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Amazon shares lost 9% Thursday night after the e-commerce giant announced disappointing revenue growth last quarter and announced that its fourth quarter, which includes the busy holiday season , would also be lower than analysts' estimates.
In the end, Amazon recorded strong earnings growth. Amazon's profit was $ 5.75 per share, or $ 2.66 against Wall Street. But Amazon investors have long been learning to focus more on revenue growth, because of Jeff Bezos' long-standing strategy of focusing on growing market share rather than paying dividends.
Amazon's revenue in North America, which stood at $ 34.3 billion, was slightly higher than analysts' estimates, while operating income for this segment reached $ 2 billion, up from $ 112 million. of dollars a year ago.
International revenues, however, reached $ 15.5 billion, well below the $ 16.5 billion set by Wall Street consensus, reflecting an unexpected slowdown in Amazon's sales to the United States. # 39; abroad. In its publication of the results, Amazon did not specify the factors that slowed the growth of international sales. Amazon also recorded a loss of $ 385 million in its international markets.
Perhaps more worrying for investors, Amazon said, the current quarter's earnings, which includes the holiday season, will range from $ 66.5 to $ 72.5 billion, which will translate into growth from one year to the next between 10% and 20%. Analysts were expecting a better vacation quarter for Amazon: they were aiming for a $ 73.9 billion business figure, a growth rate of 22%.
Despite analysts' forecasts, Amazon's own indications suggest that the holiday season will experience the slowest growth for some time. The midpoint of its forecasts calls for revenue growth of 15%. In the fourth quarter of 2017, Amazon's revenue grew by 38%. Deloitte Insights expects consumers to increase their spending by 22% over the holiday season.
Another area of concern is the fact that Amazon Web Services, the cloud services segment that has contributed to the rise in Amazon's profits, is also experiencing a slowdown in growth. AWS revenue grew 46% this quarter, which remains high, but lower than the 49% growth rate recorded last quarter. On Wednesday, Microsoft said Azure, its own cloud services company, had grown 76 percent.
After falling for much of last week, Amazon's shares rose 7 percent during the official trading session on Wednesday, although the after-profit selloff more than offset gains after hours of trading. negotiation. The drop in transactions after hours has left Amazon shares down 20% since the end of September. During this period, the Dow Jones Industrial Average decreased by 6%.
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