projected sales in the current quarter would be far below expectations, sending its stock plunging and offering the latest stark sign of how shifting economic forces are battering tech giants that thrived during the pandemic.
The company on Thursday said sales in the most recent quarter rose 15% from a year earlier, while net income was $2.9 billion—its first quarterly profit in 2022, though still a 9% decline from the same period last year.
The e-commerce giant jolted investors with its projection for revenue of $140 billion to $148 billion in the current period—analysts had expected more than $155 billion, according to FactSet. Amazon, which said the estimate includes a sizable hit from foreign-exchange factors, also said it anticipated operating income of anywhere between zero and $4 billion, reflecting the uncertainty looming over what is traditionally its biggest quarter of the year because of holiday shopping.
The company’s shares fell more than 17% in after-hours trading after the results were announced.
said the company has a set of initiatives that it is “methodically working through that we believe will yield a stronger cost structure for the business moving forward. There is obviously a lot happening in the macroeconomic environment, and we’ll balance our investments to be more streamlined without compromising our key long-term, strategic bets,” he said.
Amazon and other tech titans that have flourished through the pandemic have been reporting slowdowns this year as more people get out and do less shopping, working and entertaining themselves online. At the same time, many tech companies have been hit by a slowdown in advertising and growing concerns about inflation and the health of the economy, with fears of a recession looming.
In the third quarter, Amazon’s online store sales rose 7% to $53.48 billion after falling in recent quarters. Its online sales got a boost from its annual Prime Day sale, which this year fell in the third quarter, whereas last year it was in the second quarter.
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