Why Amazon Disappointed This Quarter
When Amazon.com reported third-quarter financial results on Thursday, it disappointed on the bottom line, but this is nothing longtime Amazon investors haven't dealt with before.
Amazon.com Inc. (NASDAQ: AMZN) reported third-quarter financial results after markets closed on Thursday. This company has been in full swing for only about a decade, ushered in by broadband and the genius of Jeff Bezos. This quarter disappointed on the bottom line, but this is nothing longtime Amazon investors haven’t dealt with before.
The company said that it had $0.52 in earnings per share (EPS) and $32.7 billion in revenue, compared to consensus estimates from Thomson Reuters of $0.78 in EPS and revenue of $32.69 billion. The same period of last year reportedly had EPS of $0.17 and $25.36 billion in revenue.
In terms of guidance for the fourth quarter, the company expects net revenues in the range of $42.0 billion to $45.5 billion and operating income to be between $0 and $1.25 billion. The consensus estimates call for $2.14 in EPS and $44.58 billion in revenue for the current quarter.
During the past quarter, Amazon launched Amazon Music Unlimited, an on-demand music streaming service with tens of millions of songs and thousands of curated playlists and personalized stations.
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For the current quarter, the company expects to create 120,000 seasonal jobs in customer fulfillment and customer service for the holiday season. Last year, Amazon transitioned more than 14,000 seasonal positions to regular, full-time roles after the holidays, and it expects to increase that number this year.
On the books, Amazon’s cash and cash equivalents totaled $12.52 billion at the end of the quarter, up from $10.27 billion in the same period from last year.
Jeff Bezos, founder and CEO of Amazon, commented in the report:
Alexa may be Amazon’s most loved invention yet — literally — with over 250,000 marriage proposals from customers and counting. And she’s just getting better. Because Alexa’s brain is in the cloud, we can easily and continuously add to her capabilities and make her more useful — wait until you see some of the surprises the team is working on now.
Shares of Amazon closed Thursday at $818.36, with a consensus analyst price target of $920.02 and a 52-week trading range of $474.00 to $847.21. In Friday’s premarket, the stock was down over 4% at $781.40.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
