Profits Off For Amazon

Wall Street Journal graphic

Amazon.com Inc. profit machine sputtered again after more than two years of surging growth, weighed down by the tech giant’s heavy investment into reducing shipping times for retail customers.

The Wall Street Journal reports Amazon's third-quarter profit fell 26% from a year ago to $2.1 billion, or $4.23 a share, missing analysts’ consensus estimate of $4.59 a share, according to FactSet. That was its first profit decline since 2017, and followed a second quarter in which the company ended its streak of record quarterly profits and missed analyst expectations.

Revenue in the latest period rose 24% to $70 billion—better than analysts’ estimates—compared with a 20% increase three months earlier. The third quarter included Prime Day, a July shopping event created to sign up new Prime subscriptions by offering members steep sales discounts.

Amazon’s profit miss sent shares down more than 7% in after-hours trading Thursday. Before the late-afternoon report, the stock was up nearly 16% this year, giving the company a market value of around $881 billion.

Amazon’s advertising business registered $3.6 billion in sales, a 43.7% increase from the year-earlier period. The unit, which sells advertising space in the form of sponsored products in search and display ads, has become another cash cow for the company.