Amazon sinks as revenue growth disappoints

Amazon sinks as revenue growth disappoints

Google parent Alphabet Inc (GOOGL.O) on Thursday missed analysts' quarterly revenue estimates for the first time in at least two years and reported continuing erosion of its operating margin, sending shares down nearly 7 percent after hours.

During a post-earnings conference call with investors, Amazon said that it expected global sales to receive a boost in the December quarter, thanks to the late Diwali in India.

But its revenue grew less than Wall Street analysts expected, and Amazon's shares fell after the results were released.

Amazon's advertising business continues to go from strength to strength after reporting net sales of $2.5bn over the third quarter which can largely be attributed to advertising service sales, a figure which confirms the business is on the threshold of establishing itself as a rival to Facebook and Google. "Amazon Business has now reached a $10 billion annual sales run rate", he said in a statement.

Operating income increased to $3.7 billion in the third quarter, compared with operating income of $347 million in the third quarter of 2017.

A drop of that magnitude would have the stock down more than 20%, putting it in a bear market. The chipmaker beat forecasts by 25 cents a share, with adjusted quarterly profit of $1.40 per share.

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

Overall revenue rose 21 percent to $33.74 billion, missing analysts' estimate by about $310 million, according to Refinitiv data.

India win Guwahati one day worldwide beating West Indies by 8 wickets
The Delhi batsman's post-match comment has left his fans wondering if Virat Kohli is planning an early retirement. Shimron Hetmyer (L) of West Indies celebrates with teammate Jason Holder after scoring his third ODI hundred.

Amazon also benefitted from strong sales of its Prime subscription program.

Google-parent Alphabet sank 3.3 percent after its revenue missed estimates, fanning concerns that investments in new businesses, rising regulatory scrutiny and competition are producing slow returns.

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. It purchased online pharmacy PillPack in June, which followed its US$13.7 billion acquisition of Whole Foods a year ago to jump start its grocery business. That division saw sales jump 35% to $US34.3 billion.

Google ad sales contributed 86 percent of revenue, but growth slowed to 20 percent from almost 24 percent last quarter.

The company now groups its advertising group under "other" on its balance sheet.

We were particularly impressed by the continued YoY operating margin expansion, which is consistent with our view the company has transformed into a 'profit machine, ' driven by multiple tailwinds (most notably AWS, which posted an over 30% operating margin for the first time).

Amazon's all-time high record stock price was $2,050.50 (£1,577.68) per share on September 4, 2018, the same day it hit the $1 trillion (£768.8bn) market cap.

Related news:

Hot News

isis-killer-beheading-video-story-top Joint Saudi-Turkish Team Finds Khashoggi Killing Was Premeditated
Oct 27, 2018 - 03:45
Other reports said Mr Khashoggi's fingers were cut off and sent to Saudi Arabia as "evidence" of a successful mission. But he suggested responsibility lay higher up: "Well, the prince is running things over there more so at this stage".

isis-killer-beheading-video-story-top Curt Schilling absent from Red Sox first-pitch ceremony
Oct 27, 2018 - 03:13
Buehler, who has never faced the Red Sox, gave up a combined nine runs in his first two playoff outings, both Dodgers defeats. The whole orchestra is decked out in B logo caps as they play the Boston anthem we've all heard too many times.

isis-killer-beheading-video-story-top Immigrant caravan could be weeks away from the U.S. border
Oct 27, 2018 - 03:09
Mexico's government said in a statement on Tuesday that it had received 1,699 requests for refugee status, including children. It has comprised between 3,000 and 5,000 people at various times as it moved through Guatemala, according to various sources.

isis-killer-beheading-video-story-top 18 dead as floods sweep away students and teachers near Dead Sea
Oct 26, 2018 - 16:20
The official, who was not named, expressed surprise that a school trip had been organised despite weather warnings. Thursday's incident is the second tragedy resulting from flash-flooding near the Dead Sea this year.

isis-killer-beheading-video-story-top Sarah Huckabee Sanders Responds to Bomb Crisis by Criticizing CNN
Oct 26, 2018 - 16:02
With two more bombs being found this morning, the country looked to the White House for a response. Waters and other Democratic foils of his. "We'll keep you posted on that", Sciutto said.

isis-killer-beheading-video-story-top Arsenal can't stop winning, Loftus-Cheek treble fuels Chelsea
Oct 26, 2018 - 15:28
Loftus-Cheek's agent has already threatened to force a move away from Stamford Bridge if the midfielder is not given more playing time.

isis-killer-beheading-video-story-top Mattis Preparing Order To Send Troops To US-Mexico Border
Oct 26, 2018 - 14:29
Trump and Vice President Pence have argued that criminals and "Middle Easterners" among the migrants seek asylum. It numbered more than 5,000 when it settled in the town of Mapastepec on Wednesday night, a local official said.

isis-killer-beheading-video-story-top Saudi king briefs Putin on investigation into Khashoggi death
Oct 26, 2018 - 09:23
Salah Khashoggi met Saudi King Salman and Crown Prince before leaving for the US. He told reporters on Thursday that he wanted to know where Khashoggi's body is.

isis-killer-beheading-video-story-top 6 children killed in adenovirus outbreak in New Jersey
Oct 24, 2018 - 09:29
Officials say that this strain is typically associated with a disease in communal living spaces. The facility is not admitting any new patients until the outbreak ends, the statement said.

isis-killer-beheading-video-story-top Caitlyn Jenner's response to Trump's memo on transgender people
Oct 24, 2018 - 09:15
Roger Severino , director of the Office for Civil Rights at the department, declined to answer detailed questions about the memo. Lisa Hollier, president of the American College of Obstetricians and Gynecologists.

isis-killer-beheading-video-story-top Manchester City in big win, Chelsea deny United
Oct 24, 2018 - 09:04
According to GiveMeSport, new footage showing what really transpired between Ianni and Mourinho . Sarri apologised to Mourinho and Ianni was later sent to do the same.

isis-killer-beheading-video-story-top US Mega Millions results: Lotto numbers for October 23
Oct 24, 2018 - 08:12
They doubled ticket prices to $2 - and tweaked the formula to make it easier to win smaller prizes but harder to win the jackpot. As of 4 p.m., Kansans had already more than $3,000,000 on tickets with no sign of letting up, lottery officials said.

isis-killer-beheading-video-story-top Turkish police find 'abandoned Saudi consulate car' in Istanbul
Oct 24, 2018 - 07:31
US President Donald Trump has called the killing of Jamal Khashoggi one of the "worst cover-ups in the history of cover-ups". Speaking to reporters at the White House , Trump said the entire operation was a fiasco.

isis-killer-beheading-video-story-top John Bolton: Russia 'Understands' Trump's Reasons for Canceling Nuclear Treaty
Oct 24, 2018 - 00:07
Russian Federation however has warned that abandoning the agreement would be a major blow to global security. The UK voiced its approval, accusing Russian Federation of non-compliance with the treaty.

isis-killer-beheading-video-story-top Tesla Announces $45,000 Mid-Range Model 3
Oct 22, 2018 - 19:06
On Thursday, Elon Musk unveiled a new "lower cost, mid-range" Tesla Model 3 vehicle coming in at around $45,000. Thursday's move to launch a version of a Model 3 with a slightly lower price is progress in this direction.