After-hours trading for the company falls after it issued holiday quarter advice that alarmed investors.
Amazon shares fell nearly 20% in after-hours trading on Thursday following the company announcement that its crucial holiday shopping season would be smaller than anticipated.
This week, the company is the most recent tech titan to displease Wall Street. Amazon has struggled to manage costs after experiencing tremendous growth during the pandemic, as inflation as well as increasing interest rates have had an impact. The company has decelerated the construction of new infrastructure, leased out some warehouse space, as well as implemented a hiring freeze in some areas of its operations.
Amazon reported sales of $127.1 billion for the three months that ended September 30, a little less than analysts predicted. After two quarters of losses, the company made a $2.9 billion gain. However, it was Amazon’s holiday forecast quarter that got investors worried.
Amazon predicted sales revenue somewhere between $140 billion and $148 billion in the 4th quarter, while analysts predicted sales of $155.15 billion. Amazon CEO Andy Jassy stated that he is “motivated by the consistent progress we’re making on decreasing expenses in our stores fulfillment network, and we have a number of initiatives that we’re methodically working through that we trust will achieve a greater cost structure for the company moving forward.”
“Evidently, there is a lot going on in the macroeconomic environment, and we will harmonize our investments to be more streamlined without jeopardizing our pivotal long-term, strategic bets.” What will not change is our maniacal focus on the consumer experience, and we are sure that we will provide a fantastic experience for our customers this holiday season.
Amazon’s results come on the heels of discouraging statistics from its Big Tech contemporaries. The share price of Facebook parent Meta dropped to multi-year lows this week after the company reported its second straight quarter of declining sales and warned of rising expenses and losses at its metaverse unit. Alphabet as well as Microsoft’s stock prices have dropped following forecasts of slower sales growth.
Amazon reported its 2nd quarterly loss in a row in July, with much of the loss attributed to its investment in Rivian Automotive, a struggling electric vehicle maker, but skyrocketing costs as well as slowing sales also weighed on Amazon’s online marketplace business.
