Amazon, facing growing competition on all fronts led by Walmart, reported disappointing third-quarter sales, sending its shares down 5% in after-hours trading.
Amazon shares dropped in after-hours trading after its third-quarter sales fell short of consensus Wall Street estimates. (Photographer: Jeenah Moon/Bloomberg)
Amazon.com, facing growing competition on all fronts led by Walmart, reported disappointing third-quarter sales, sending its shares lower in after-hours trading.
Sales in the quarter ended Sept. 30 rose 29% to $56.6 billion, compared with the consensus Wall Street estimate of sales rising above $57 billion. Sales would have risen 30% without the negative impact of a stronger dollar that hurt translated overseas sales by $260 million.
Amazon shares, after surging 7% in regular trading, dropped 5% after hours.
As the industry heads into the crucial holiday season, the Seattle giant forecast Q4 sales to rise between 10% and 20%, to as much as $72.5 billion, also missing Wall Street estimates. Foreign currency translation is expected to hurt sales by about 0.8 of a percentage point, the company said.
In a comforting sign, third-quarter net income jumped to a better-than-expected $2.9 billion, or $5.75 a share, from $256 million, or 52 cents a share, a year earlier. Operating income in North America surged to $2 billion, from $112 million a year earlier. The company also narrowed its international operating loss by about 60%.
Amazon’ s AWS cloud service unit was again the bright spot as operating income there jumped 77%, to $2.1 billion, representing more than half of Amazon’s total profit.
In a sign that Amazon Business is the company’s growing focus, Amazon founder and CEO Jeff Bezos called out that the segment has “reached a $10 billion annual sales run rate and is serving millions of private and public-sector organizations in eight countries.”
“Amazon Business is adding customers rapidly, including large educational institutions, local governments and more than half of the Fortune 100,” Bezos said.
Amazon last quarter unveiled new Business Prime benefits in the U. S., Germany and Japan, including giving businesses the ability to streamline purchasing. It also introduced an Amazon Business American Express card. (More coverage to follow.)
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