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AMZN Stock Down 4.7%, Amazon Reports Q3 Earnings Results that Are Below Expectations

UTC by Steve Muchoki · 3 min read
AMZN Stock Down 4.7%, Amazon Reports Q3 Earnings Results that Are Below Expectations
Photo: Amazon

Amazon’s e-commerce sales jumped 3% in the past year to $49.94 billion, thereby missing analysts’ estimates of $51.53 billion.

Amazon.com Inc (NASDAQ: AMZN) stock was trading at around $3,285, down approximately 4.7%, during Friday’s pre-market trading session. The sudden drop in the Amazon shares price occurred as investors showed their disappointments with the company’s Q3 earnings results. The decline was sudden as AMZN shares had gained almost 2% during the day.

Notably, Amazon reported revenue of $110.81 billion during the three months ending September 30, while a survey conducted by Refinitiv indicates analysts expected the company to report revenue of $111.6 billion. Consequently, the earnings per share for the third quarter came in at $6.12, while analysts expected $8.92 according to Refinitiv.

The e-commerce technology company has recorded a notable decline in volume as people return to physical shopping. Furthermore, herd immunity attained in most global places has resulted in the easement of Covid-related restrictions.

Notably, Amazon’s e-commerce sales jumped 3% in the past year to $49.94 billion, thereby missing analysts’ estimates of $51.53 billion. Overall, the company saw its revenue spike by 15% during the third quarter compared to Q3 2020. However, the company’s cloud computing section saw a spike in revenue of 39% to $16.1 billion during the third quarter.

Other segments that contribute to the overall revenue that includes advertising units experienced a spike of 49% in the past year.

The quarter was among the first earnings results without Jeff Bezos as the Chief Executive Officer. Notably, Bezos resigned from the position at the beginning of this year to focus on his other businesses.

Amazon Stock and Company’s Performance in Q3

In spite of the fact that the company has been one of the largest beneficiaries of Covid crisis. Amazon stock has not gained significantly compared to the likes of Tesla Inc (NASDAQ: TSLA) stock in the same period.

Notably, Amazon stock has gained 13%, 5.8%, and 3.5% in the past year, YTD, and three months respectively through Thursday. Tesla on the other side has gained approximately 177%, 52%, and 56% in the same period respectively.

While Amazon has a market cap of $1.7 trillion, Tesla on the other hand has a market capitalization of $1 trillion.

Amazon reported that its Q4 will be more of the Q3 2021, hereby disappointing investors even more. “In the fourth quarter, we expect to incur several billion dollars of additional costs in our Consumer business as we manage through labor supply shortages, increased wage costs, global supply chain issues, and increased freight and shipping costs—all while doing whatever it takes to minimize the impact on customers and selling partners this holiday season,” Amazon CEO Andy Jassy said in the company’s earnings release. “It’ll be expensive for us in the short term, but it’s the right prioritization for our customers and partners.”

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Steve Muchoki

A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies. Mythology is my mystery! "You cannot enslave a mind that knows itself. That values itself. That understands itself."

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