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Amazon Q4 sales forecast comes in below estimates

27 October, 2018, 21:45 | Author: Sara Gill
  • Amazon Falls After Missing Sales Forecast

But now, for the first time, they are starting to look consistent - with four consecutive quarters above $1 billion in profit. But the focus on profit that investors have long sought was not enough to keep them happy. Shares of Amazon.com Inc., which are up 50 percent so far this year, fell 7 percent to $1,655.98 in extended trading Thursday. The Street wanted to hear $73.79 billion, but Amazon forecast between $66.5 billion and $72.5 billion. A year ago, the pace was twice as quick. The company has dominated e-commerce in the USA, but faces stepped-up competition from rivals such as Walmart Inc. Investors increasingly envision a constellation of concerns, from rising interest rates, intensifying tensions over trade, a slowdown in China and the prospect that US corporate earnings growth will soon slow. On a call with reporters, Amazon CFO Brian Olsavsky said about 400,000 employees will be affected by a promise made last month to bump the company's minimum wage to $15 an hour for all employees, including part-time and seasonal workers.

Amazon has been adding many new features and offerings to AWS, and recently added the T3 service, which offers ultra fast instances powered by the company's Nitro System hardware-accelerate hypervisors. Deutsche Bank analyst Lloyd Walmsley reiterated his Buy rating for Amazon stock due to his confidence about other long-term opportunities, such as grocery, global markets, and ad businesses. The company continues to increase wallet share with existing cloud customers, and acquisition remains strong evidenced by Amazon's healthy pipeline of new enterprise clients. Amazon shares have roughly tripled in the past three years, while Alphabet is up more than 50 percent.

Alphabet (Xetra: ABEA.DE - news) 's revenues missed forecasts.Its stock was more than 5% lower on Friday.


In the latest quarterly reports, Microsoft's cloud computing business Azure marked revenue growth of 76 percent, down from 89 percent in the previous quarter. After years of rapid growth, the share of Americans who go online, use social media or own mobile devices has plateaued in the past two years, according to a September analysis of Pew Research Center data. In a statement, Bezos said, "Amazon Business has now reached a $10 billion annual sales run rate and is serving millions of private and public-sector organizations in eight countries". Amazon appeals to advertisers because individuals generally are using the site to shop, unlike users browsing Alphabet Inc's Google, the ads sales leader, to find general information or rival Facebook Inc to see updates from their friends. A big reason behind that was the absorption of Whole Foods Market and the 87,000 people who work there.

After the bell, Amazon tanked 8 percent.

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