Amazon shares slump after online retailer posts third-quarter profit drop
Shares in online retail giant Amazon slumped in after-hours trading this evening after the firm reported a slump in third-quarter profit.
Shares in Jeff Bezos’ company fell as much as eight per cent after it posted a fall in net income for the first time in two years, from $2.88bn to $2.13bn in the three months to the end of September.
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Income per share was $4.23, however, analysts had forecast a profit of $4.62 per share, according to data from Refinitiv.
Amazon’s web services unit (AWS), which accounts for the bulk of the firm’s operating income, reported net sales of $8.99bn compared to expectations of $9.19bn.
The firm also said it expects operating income in the fourth quarter to be between $1.2bn and $2.9bn, compared to analyst expectations of $4.19bn.
The e-commerce giant posted revenue of $69.98bn in the third quarter, up from $56.58bn the previous year, beating estimates of $68.81bn.
The increase in sales was driven by the firm’s Prime Day sale in July and the rollout of free next-day delivery for Prime users.
Amazon founder and chief executive Jeff Bezos said: “Customers love the transition of Prime from two days to one day- they’ve already ordered billions of items with free one-day delivery this year.
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“It’s a big investment, and it’s the right long-term decision for customers. And although it’s counterintuitive, the fastest delivery speeds generate the least carbon emissions because these products ship from fulfilment centres very close to the customer – it simply becomes impractical to use air or long ground routes.”
Main image credit: Getty