Amazon’s third-quarter results released on Thursday were lower than market expectations, and its guidance for the holiday season also disappointed the market. Affected by this news, the stock fell more than 4% in after-hours trading. Amazon’s earnings per share for the quarter were US$6.12, well below the market expectation of US$8.92. The company’s revenue for the quarter was 110.81 billion U.S. dollars, which was also lower than the market expectation of 111.6 billion U.S. dollars.
As consumers return to physical stores and the supply chain encounters challenges, Amazon’s sales growth has gradually slowed down. The company’s third-quarter revenue increased by 15%, down from 37% in the same period last year.
Amazon expects revenue in the fourth quarter to be between 130 billion and 140 billion U.S. dollars, corresponding to an increase of 4% to 12%. But according to FactSet’s survey, analysts on average expect the company’s fourth-quarter revenue to increase by 13.2% to 142.1 billion US dollars.
Amazon CEO Andy Jassy (Andy Jassy) said that due to labor shortages, increased labor costs, tightening global supply chains and rising freight rates, the company is expected to spend “billions of dollars” in additional costs in the consumer business in the fourth quarter. .
“In the short term, this brings us high costs, but for customers and partners, it should be the focus of attention.” Jiaxi said in the statement.
The company has taken steps to strengthen the supply chain in the face of global challenges. They have added new ports and expanded the number of transport aircraft and transport trucks.
Amazon said earlier this month that it will hire 275,000 permanent and seasonal employees across the United States, to some extent alleviate the pressure brought by the holiday season shopping boom. The company’s CFO Brian Olsavsky said last quarter that because Amazon plans to recruit and retain employees, they will face greater labor costs, including issuing a $3,000 signing bonus and fully subsidizing employees to attend college. policy.
Osavsky said that Amazon may invest $4 billion in labor and inflation-related costs, and it will also be used to deal with warehouse productivity issues.
Amazon said that the company’s operating profit in the fourth quarter was between 0 and 3 billion U.S. dollars, which is much lower than the 6.9 billion U.S. dollars a year ago.
Online store revenue increased by 3% year-on-year to 49.9 billion U.S. dollars, and physical store revenue increased 13% to 4.27 billion U.S. dollars.
Revenue from third-party seller services (including platform commissions, and order fulfillment and distribution fees) increased by 18% to $24.25 billion, slower than 34% in the second quarter and 60% in the first quarter.
In addition, Amazon’s service revenue surpassed retail business for the first time in history. The company’s product net sales for the quarter were 54.9 billion U.S. dollars, while Amazon Web Services (AWS), advertising, third-party seller services and Prime subscription revenues totaled 55.9 billion U.S. dollars.
AWS performance exceeded market expectations, revenue increased by 39% to 16.11 billion US dollars, and analysts’ average expectation was 15.48 billion US dollars. AWS’s operating profit for the quarter was 4.88 billion U.S. dollars, and the parent company’s operating profit was only 880 million U.S. dollars.
It is reported that if AWS is removed, Amazon will suffer losses in the current quarter.