Amazon’s third-quarter earnings beat estimates, but its revenue and fourth-quarter outlook fell short of expectations, dropping its stock roughly 9 percent in after-hours trading — on pace for its lowest close since May, reports CNBC.
The company gave fourth-quarter revenue guidance in the range of $66.5 billion and $72.5 billion, well-below consensus of $73.79 billion. The fourth quarter is the biggest and most important sales period for Amazon because of the holidays.
The results show how Amazon could have a disappointing holiday season in its all-important fourth-quarter, as the overall business sees a slight deceleration in growth. At the same time, it highlights the growth of Amazon’s high-margin businesses, like its cloud and advertising units, that are more profitable than its core retail segment.
Net income, meanwhile, grew more than 10-times from the year-ago period, to a record-high $2.8 billion, marking the fourth straight quarter of topping $1 billion in profits.
In a prepared statement, Amazon CEO Jeff Bezos highlighted the growth of Amazon Business, its marketplace for business customers.
“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,” Bezos said in a statement.
Amazon’s quarterly report comes amid a broader market sell-off that saw other tech stocks get hammered in recent weeks. Amazon stock is up roughly 49 percent this year.
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