Amazon, the online shopping giant, missed its consensus sales estimates as it reported its third quarterly earnings on Thursday night. The report took its share price down by more than six percent during after-hours trading.
The net sales of the company for the quarter rose by 29 per ent year-on-year from $43.7 billion to $56.6 billion (£49.8 billion). It narrowly missed the estimates amounting to $57 billion as what was collated by S&P Global Market Intelligence .
Amazon also projected lower-than-expected net sales for the current quarter. It predicted its sales to be between $66.5 billion and $72.5 billion as compared with the estimates that amounted to $73.8 billion.
However, on a more positive note, the net income of the company, or profit before tax, increased to $2.9 billion as compared to taking in only $256 million during the third quarter of the previous year. This was a comfortable rise past the Wall Street estimates that amounted to $1.9 billion, and an increase of 91 percent year-on-year.
According to data from Refinitiv, the revenue at Amazon Web Services, its fast-growing cloud computing business which currently holds the top spot when it comes to global market share, increased by nearly 46 percent to $6.68 billion, edging past the estimates of $6.67 billion.
The quarter witnessed Amazon invest heavily in its original video content and Prime delivery service, as its operating costs increased by 21.8 percent. Last week, the company committed to creating more than 1,000 new highly-skilled jobs in the United Kingdom next year.
David Jones, the chief market strategist of Capital.com said that while the initial share price decline on the results of Amazon seemed harsh, “the reaction is much more to do with broader market volatility over the last few weeks than anything else.”
Earlier this October, tech stocks lost $172 billion in a single day in a Wall Street slide, which was primarily caused by the increasing interest rates in the United States of America.