Weak Amazon, Alphabet results ignite growth worries

Weak Amazon, Alphabet results ignite growth worries

In the third quarter past year, Amazon pulled in $43.7 billion in sales.

The third-quarter results were the second time running that billionaire Jeff Bezos' firm had fallen short of sales targets and, allied to a similar disappointment from Google-owner Alphabet GOOGL.O , they sent a shockwave through stock markets.

Amazon, the biggest online retailer, reported a second consecutive quarter of sales that fell short of estimates - the first back-to-back revenue miss in nearly four years. Analysts estimated profit of US$3.11 a share. Microsoft Corp. ($821 billion) reclaimed the title of world's second most valuable company, behind Apple Inc. "The second thing is they're anxious about competition", he said, noting that there were both signs of a slowing economy and that major retailers were aggressively deploying strategies to compete with Amazon for holiday sales.

"We believe that while growth in the core retail business may appear to slow down in the immediate term...."

For years, Amazon has made expensive bets on new technology and programs, like its $13.7 billion acquisition of Whole Foods in 2017 to storm the USA grocery industry. Analysts were looking for $57.1 billion.

Those results combined with rising expenses brought down the company's operating margin to 25 percent from 28 percent a year ago. It has also ventured into areas where commercial opportunities are nascent, including regions such as India and Nigeria and businesses such as self-driving cars.

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Amazon's stock closed regular trading up $US117.97 a share, or 7.1%, to $US1,782.17.

Wall Street stocks finished a volatile week on a sour note on Friday (Oct 26) after disappointing earnings from Amazon and Google-parent Alphabet sparked a selloff in tech shares.

After the e-commerce giant announced lower-than-expected earnings in the third quarter on Thursday night, it wasn't just Amazon's stock that fell.

"We're expecting a strong holiday season, so there's no message in our forward guidance against that", he said on a conference call with media. On a per-share basis, it reported earnings of $5.75, beating the $3.29 per share analyst expected, according to Zacks Investment Research. In a statement, Bezos said, "Amazon Business has now reached a $10 billion annual sales run rate and is serving millions of private and public-sector organizations in eight countries". Amazon's cloud business saw a 46 percent rise in revenue to $6.68 billion, only narrowly edging past estimates of $6.67 billion. Capital expenditures soared to $5.3 billion from $3.5 billion past year, with 20 data center sites in development, Porat said.

Olsavsky, the CFO, also said the company is operating more efficiently, hiring less than in the past and adding less warehousing space.

"Amazon saw a meaningful slowdown in their global division".

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