Amazon sinks as revenue growth disappoints

Amazon sinks as revenue growth disappoints

Revenue from Amazon's worldwide business, which brings in 27.5 per cent of total sales, was at the heart of the shortfall in results, growth halving to 13.4 per cent compared to the previous quarter.

Amazon's third-quarter profit blew away analysts' heady expectations, but it still managed to disappoint Wall Street.

Amazon's global sales grew at just 13% to $15.5 billion, compared to a growth of 29% a year ago.

Meanwhile, Amazon Web Services continued to grow at a rapid clip, now pushing a run rate of $27 billion. Analysts projected $US3.9 billion.

Investors focused on the negative.

Shares of the company were down 7.2 percent at $1,654 in midday trade. The selloff completely wiped out the stock's strong gains earlier in the day in the regular session. They have reduced their revenue forecast for the current quarter by 3% to $71.1 billion. But that still fell shy of the $57.1 billion analysts had predicted.

Q3 earnings per share: $US5.75. Analysts estimated profit of US$3.11 a share. The stock declined as much as 9.4 per cent in extended trading.

Q4 revenue (forecast): Between $66.5 billion and $US72.5 billion.

But the company's revenue for the period was lower than expected, and it offered a disappointing revenue forecast for the fourth quarter. The Google parent earned $13.06 per share for the third quarter, compared to the estimate of $10.42 a share. In last year's fourth quarter, the company earned $3.75 a share.

Yet again, Amazon's cloud business gave it a big boost.

But the company also saw a windfall from its retail operations, particularly those in North America.

Worldwide net sales came to $15.55 billion, up 13 percent, with an operating loss of $494 385 million.

On the good side, the world's largest e-commerce site reported profit of $2.9 billion, up from $256 million a year ago, and continuing its streak of $1 billion-plus quarterly results following years of meager profits or losses. Add in the recent stock market rout, and the tech companies had little room to bobble their results.

On the brighter side was data that showed gross domestic product increased at a 3.5 percent annualized rate in the third quarter as a tariff-related drop in soybean exports was partly offset by the strongest consumer spending in almost four years and a surge in inventory investment. Amazon Business has also recently launched new Business Prime benefits in the US, Germany and Japan.

However, on Thursday night it said operating profits in the coming quarter could be as low as $2.1bn, flat with past year.

The company now groups its advertising group under "other" on its balance sheet. Operating income was $2 billion.

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