Amazon (AMZN.US) stock dropped more than 4% in pre-market after the e-commerce giant posted disappointing results for the third quarter and delivered weak guidance for the critical holiday period. In the three months concluding September 30, 2021, the company reported $110.8 billion in revenues, up 15% compared to the year-ago period. Amazon also reported net income of $3.2 billion in the period, or $6.12 per share.
Analysts had expected the company to post revenues of $111.6 billion, and per-share earnings of $8.92. The company’s net income dipped by some 49% on a year-over-year basis. The company's cloud-computing unit, Amazon Web Services, reported revenue of $11.6 billion, up 29% from the year ago period. For its fourth quarter, Amazon expects revenue in the range of $130 billion to $140 billion. That's below market expectations of $142 billion.
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Create account Try a demo Download mobile app Download mobile app"We've always said that when confronted with the choice between optimizing for short-term profits versus what's best for customers over the long term, we will choose the latter — and you can see that during every phase of this pandemic," Chief Executive Andy Jassy said in the Amazon earnings release. Jassy expects Amazon 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."
Amazon plans to build its first large-format retail stores to compete with Walmart (WMT.US). Therefore Amazon must continue to develop warehouse distribution centers and devise a strategy to build physical stores, which may increase costs in the following quarters.
Amazon (AMZN.US) stock plunged 4% in pre-market and is currently testing support at $3294.00 which coincides with 23.6% Fibonacci retracement of the downward move launched at the end of July. Source: xStation5
