Amazon Earnings Show a Sharp Slowdown in E-Commerce. The Stock Is Falling.

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Amazon shares are heading little successful precocious trading Thursday aft the e-commerce and unreality computing elephantine reported mixed results for the June quarter, with better-than-expected profits but income that fell shy of Wall Street estimates.

The miss reflects a shortfall successful Amazon’s e-commerce business, which suffered a crisp deceleration from caller maturation trends. The e-commerce slowdown was partially offset by better-than-expected results successful the company’s unreality computing, advertising, and third-party seller segments.

For the quarter, Amazon (ticker: AMZN) posted income of $113.1 billion, up 27% from a twelvemonth ago, oregon 24% erstwhile adjusted for currency, close successful the mediate of the company’s guidance scope of $110 cardinal to $116 billion, and a small shy of Wall Street’s statement of $115.4 billion. Earnings were $15.12 a share, up of analysts’ $12.28 per stock forecast. Operating income was $7.7 billion, toward the apical of the company’s projected scope of $4.5 cardinal to $8 billion, and conscionable beneath the Wall Street statement of $7.8 billion.

Revenue from online stores was $53.2 billion, up 16% from a twelvemonth ago, oregon 13% adjusted for currency, good shy of the Street statement forecast of $57.3 billion. That was beneath the 41% maturation successful the March 4th and 49% maturation a twelvemonth ago.

Third-party services gross was $25.1 billion, up 38%, oregon 34% adjusted for currency, supra the statement forecast astatine $24.8 billion. But that was nevertheless a slowdown from 60% successful the March 4th and 53% a twelvemonth ago.

Amazon Web Services, the company’s unreality business, had gross of $14.8 billion, up 37%, and good up of the Street estimation astatine $14.3 billion, accelerating from 32% maturation successful March and 29% maturation a twelvemonth ago.

“Other” revenue, mostly advertising, was $7.9 billion, up 87%, oregon 83% connected a currency adjusted basis, good up of statement astatine $7 billion, and accordant with caller beardown advertizing information from Facebook, Alphabet and different ad-driven businesses. Physical store gross was $4.2 billion, up 11%, topping the Street presumption astatine $3.9 billion.

North American income growth, excluding overseas speech effects, slowed to 21% successful the quarter, down from 39% successful March and 44% a twelvemonth ago. Operating borderline successful North America was 4.7%, down from 5.4% successful March, though up from 3.9% a twelvemonth ago. International income were up 26%, down from 50% successful the March quarter, and 41% successful the twelvemonth earlier quarter.

For the September quarter, Amazon is projecting income of $106 cardinal to $112 billion, shy of the Street statement astatine $118.6 billion, with operating income ranging from $2.5 cardinal to $6 billion, versus $6.2 cardinal a twelvemonth ago. The institution said guidance assumes astir $1 cardinal successful costs related to Covid-19. 

Amazon shares are down 6.7% successful precocious trading. The banal is up 11% successful 2021 , trailing the S&P 500 ‘s 18% gain.

Write to Eric J. Savitz astatine eric.savitz@barrons.com

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