Amazon Reports More Profit In Q3, But Revenue Lag Hurts Stock

India’s October December festive season is the time most households buy big-ticket items

The weaker than expected third quarter results and guidance prompted analysts to cut fourth quarter revenue estimates.

Google has been fined $7.7 billion for antitrust violations in Europe over the last two years, and heightened attention on privacy, security, competition and the rise of artificial intelligence tools has led investors to fret about potentially costly regulatory scrutiny in the United States and elsewhere.

But the company tempered that standout result with a revenue shortfall in the third quarter and a revenue outlook for the holiday period that was a bit lighter than analysts had forecast.

USA stocks plunged on Friday as grim earnings reports from Amazon and Alphabet rekindled a rush to dump technology and high-growth stocks, but data showing economic growth in the last quarter slowed less than expected provided some relief.

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's net income in Q3 came to $2.9 billion, or $5.75 per diluted share, on revenue of $56.57 billion. The stock declined as much as 9.4 per cent in extended trading. The company this month pledged to pay all warehouse workers at least US$15 an hour, which will affect 400,000 employees in the USA and U.K., Chief Financial Officer Brian Olsavsky said. Amazon has relied on the growth of its Prime members, estimated at about 97 million in the US, who pay fees in exchange for shipping discounts, video streaming and other services.

At $1.6 Billion, Mega Millions Hits Lottery Record
In doing so, Powerball changed the odds of winning the jackpot from one in 175 million to one in 292.2 million. The biggest single payout came in August 2017, when a MA woman claimed a single lump sum worth $480.5 million.


Amazon also is investing in physical stores and the pharmacy business. The company continues to increase wallet share with existing cloud customers, and acquisition remains strong evidenced by Amazon's healthy pipeline of new enterprise clients.

Amazon CEO Jeff Bezos's wallet is looking a little lighter. Investors can get skittish when signs suggest the company is ramping up expenses without regard to maintaining a profitable business.

Wall Street analysts projected fourth-quarter revenue of $73.79 billion.

Our earlier story this week predicted Amazon's shares would begin to enter a bear market by falling 21% off their high, but Amazons' outlook has significantly deteriorated since then.

Amazon has been adding many new features and offerings to AWS, and recently added the T3 service, which offers ultra fast instances powered by the company's Nitro System hardware-accelerate hypervisors.

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