Amazon reported Q3 financial results: here are the highlights
- Amazon's eCommerce sales grew only 22% in the second quarter.
- The tech titan gave weaker than expected guidance for fiscal Q3.
- Shares of the company tanked more than 5% in after-hours trading.
Amazon.com Inc (NASDAQ: AMZN) said on Thursday its sales continued to grow in the fiscal second quarter but at a slower pace as the U.S. government eased COVID-19 restrictions that enabled bricks-and-mortar stores to reopen.
Amazon earned $15.12 per share in the second quarter versus the year-ago figure of $10.30 per share. Its sales printed at $113.1 billion – an increase from $88.9 billion last year. According to FactSet, experts had forecast a higher $115.4 billion of sales in the recent quarter and $12.28 of EPS.
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The eCommerce giant’s Q2 results include sales from its annual Prime Day.
Sales from individual business segments
Much like Google and Facebook, Amazon benefitted from a surge in digital advertising that fuelled an 83% annualised growth in its “other” revenue to $7.92 billion. Amazon Web Services noted a 37% year over year increase in sales to beat Wall Street estimates.
According to Amazon, its cloud-computing segment made up roughly 60% of its total operating income in the recent quarter.
Guidance for the third quarter
Amazon warned that sales growth will continue to decline in the future. For the fiscal third quarter, it forecasts up to $112 billion of sales and $2.5 billion to $6.0 billion of operating income. In comparison, analysts are calling for $119.3 billion of net sales and $8.24 billion of operating income.
The earnings report comes a month after Bloomberg said Amazon could be forced to divest its logistics assets.
Ed Lee’s comments on CNBC’s “Closing Bell”
Commenting on the earnings report on Thursday, New York Times’ Ed Lee said on CNBC’s “Closing Bell”:
“AWS did really well, and that’s where the new CEO comes from. But with the core business, eCommerce, you have to question is there a certain saturation point they’re hitting in North America?”
Amazon’s eCommerce sales jumped 22% only despite the boost from Prime Day. Shares of the company tanked more than 5% in after-hours trading.