The e-commerce giant cannot convince with the quarterly figures for Q3. Delivery bottlenecks resulted in lower growth. The company is also cautious with forecasts for the Christmas quarter.
Amazon missed expectations with the quarterly figures presented for the third quarter of the year. This is mainly due to delivery problems. Investors weren’t thrilled because analysts had expected earnings per share of $ 8.92. Instead, the company is trading just $ 6.12 in the Quarterly results. In after-hours trading, the share fell by five percent at times.
Sales were also slightly lower than expected. Amazon reported sales growth of 15 percent to $ 110.8 billion, compared to $ 111.6 billion previously expected. In the second quarter, sales were still at $ 113.1 billion. Due to higher costs, the net profit also fell to 3.2 billion US dollars.
AWS is growing much faster than online retail
In the area of online trading, which is Amazon’s core business, sales rose by just three percent. In contrast, the Amazon Web Services (AWS) area clearly wins. Here sales rose 39 percent to $ 16.1 billion. The area in which Amazon reports its online advertising business also grew strongly. Here the company recorded a 49 percent increase in sales.
One could look to the fourth quarter with optimism. After all, the holidays are usually a huge boost for online business. But Amazon remains cautious and only predicts growth of around four to twelve percent. In particular, bottlenecks in the supply chain and a shortage of labor are likely to depress growth. The company also plans to spend several million dollars to avoid problems during the holidays. The money is intended to be used for higher wages and shipping costs and to reduce delivery bottlenecks.
It’ll be expensive for us in the short term, but it’s the right prioritization for our customers and partners,
explains Amazon’s CEO Andy Jassy in the earnings release. He also emphasizes that Amazon would always choose the former when deciding between long-term user satisfaction and short-term profit. Other big players such as Microsoft or Alphabet, on the other hand, were able to convince with consistently positive numbers. Only Apple also struggled with delivery bottlenecks.
Source: OnlineMarketing.de by onlinemarketing.de.
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