Amazon CEO Andy Jassy at the GeekWire Summit on Tuesday, October 5, 2021, in Seattle, Washington, USA.
David Ryder | Bloomberg | Getty Images
Amazon The company’s shares plunged more than 9% on Friday report Second-quarter results were mixed, and forecasts for the third quarter were below Wall Street expectations.
Second-quarter revenue rose 10% year-on-year to $147.98 billion, slightly lower than the London Stock Exchange Group’s forecast of $148.56 billion. Amazon’s net income nearly doubled from a year earlier to $1.26 a share, beating analysts’ expectations of $1.03 a share and providing the latest evidence that the company’s focus on cost cutting is strengthening its bottom line.
Amazon said it expected revenue of $154 billion to $158.5 billion in the third quarter ending in September. The midpoint of that range was $156.25 billion, below consensus estimates of $158.24 billion, according to LSEG.
The company said sales were lower than expected as consumers continued to “mark down” on low-priced items such as daily necessities and consumables, or items that tend to be cheaper and run out frequently. What’s more, a chaotic news cycle means consumers are more distracted than usual and may wait to make a purchase or abandon their shopping carts entirely, said Amazon Chief Financial Officer Brian Olsavsky. Said in a telephone interview with reporters.
Olsavsky noted that recent events such as the Olympics, the approaching presidential election and the assassination attempt on former President Donald Trump have distracted consumers, making it an “unpredictable quarter.”
JPMorgan analysts said on Friday they were less concerned about retail underperformance and were instead encouraged by Amazon’s continued strength. Cloud computing part. Amazon Web Services revenue reached $26.3 billion in the quarter, exceeding consensus estimates of $26 billion.
“Sometimes retail dominates Amazon’s business, and sometimes it’s AWS,” analysts at JPMorgan wrote in a note to clients. They gave the stock an overweight rating.
BMO Capital Markets analysts agreed, saying they were pleased that AWS accelerated its growth for the third consecutive quarter, indicating that the cost optimizations of recent quarters are now a thing of the past.
Analysts with an outperform rating on Amazon stock said: “We believe AWS is well-positioned to benefit from the shift back to modernization, with additional benefits as new workloads are born in the cloud. “While Amazon is seen as lagging far behind in AI, we believe Amazon is a major beneficiary of AI and has already achieved a multi-billion dollar run rate business in AI. “
Revealed: CNBC parent company NBCUniversal owns NBC Sports and NBC Olympics. NBC Olympics is the U.S. rights holder for all summer and winter Olympics through 2032.
