Amazon’s quarterly profits fail to meet expectations

Oct 28, 2016

Firm records sixth straight profitable quarter as cloud business surges 55% to $3.23bn

Amazon. com reported a lower-than-expected quarterly profit on Thursday as expenses rose and the company provided a disappointing fourth-quarter revenue forecast.

Amazon, whose shares were down 6.8 per cent in after-hours trading, said its net income rose to $252 million, or 52 cents per share, from $79 million, or 17 cents per share, a year earlier.

It was the company’s sixth straight profitable quarter.

But earnings per share were far short of the average estimate of 78 cents, according to Thomson Reuters I/B/E/S.

Amazon forecast net sales of between $42.0 billion and $45.5 billion for the current quarter, which includes the all-important holiday shopping season.

Analysts on average had expected fourth-quarter sales of $44.58 billion, according to Thomson Reuters I/B/E/S.

Amazon said earlier this month it would hire more than 120,000 seasonal workers in the United States for the holiday season, 20 per cent more than last year, highlighting the growing threat the company poses to traditional retailers.

The company reported a 29 per cent rise in quarterly revenue, in line with expectations, boosted by a big jump in sales from its Prime Day annual shopping festival, strong back-to-school shopping and its market-leading cloud services business.

The world’s biggest online retailer said its net sales rose to $32.71 billion in third quarter ended September 30th from $25.36 billion a year earlier.

Amazon Web Services, the company’s cloud services business, surged 55 percent to $3.23 billion, beating the average estimate of $3.19 billion, according to market research firm FactSet StreetAccount.

Source: IRISH TIMES