Without today’s pre-market performance, Amazon shares have lost 35% this year (Photo Source: Profimedia)
Shares of US e-commerce giant Amazon fell 13% in the after-hour session on Wall Street yesterday after the company provided a series of weak estimates for the current quarter and failed to meet the expectations of the market in terms of revenue, according to CNBC.
The group had revenues of $ 127.1 billion, in the context in which analysts of the data provider Refinitiv expected, on average, 127.46 billion. The Amazon Web Services division posted revenues of $ 20.5 billion, up from $ 21.1 billion estimated by StreetAccount analysts, while the advertising division’s revenues reached $ 9.55 billion, slightly above. estimates.
Amazon said it expects fourth quarter 2022 revenue to be between $ 140 billion and $ 148 billion, representing 2% to 8% year-over-year growth. Analysts had expected sales to reach $ 155.15 billion.
The company is now trying to “tighten its belts, including stopping hiring in some businesses and eliminating some products and services,” says CFO Brian Olsavsky.
Like the others Large tech companies, Amazon had an extremely complicated year as it faced a new geopolitical environment, inflation at the highest levels of recent decades, and steadily rising interest rates. However, one message of optimism – in the current US reporting season – is Apple’s results, which have demonstrated resilience in an environment characterized by strong dollar performance and a tightening economic landscape. The company reported revenues and net earnings per share (EPS) of $ 90 billion, respectively $ 1.29 in the third quarter, above analysts’ expectations.
It’s the second time this year that Amazon’s results have disappointed investors enough to generate a double-digit decline in shares. In April, the company’s second-quarter forecast caused a 14% drop on Wall Street.
Under CEO Andy Jassy, who replaced Jeff Bezos in July 2021, Amazon responded to rising interest rates with aggressive cost cutting across multiple divisions. The group has closed warehouses, halted some experimental projects, closed the telemedicine service and frozen company-wide hiring processes for the retail division.
Excluding today’s pre-market dynamics, Amazon shares fell 35% in 2022. The company has a capitalization of $ 1.13 trillion.
