(BFM Bourse) – Amazon unscrews in the first exchanges on Wall Street, the forecasts of the American giant of online sales have clearly disappointed investors. The group expects a slowdown in sales in the fourth quarter, a crucial period of the year for Amazon because it includes the holiday season.
The big names in technology are struggling to convince. After Microsoft, Google or even Meta, Facebook’s parent company, it’s Amazon’s turn to disappoint the markets. The American distribution giant recorded a 9% drop in net profit in the third quarter on Thursday and reported lower-than-expected sales, with forecasts considered cautious for the fourth quarter.
The market sanctions Amazon’s caution for the pivotal period of the end of the year. The title unscrewed by nearly 10% to quote less than 100 dollars, in the first exchanges on Wall Street.
“Anemic” growth at the end of the year
Amazon nonetheless returned to profit after two consecutive quarters of losses, with a net profit of $2.87 billion for the July-September period, according to a statement released Thursday.
As for turnover, it increased by 14% over one year, to 127.1 billion dollars, or twice the rate observed in the first and second quarters (7%). It should be noted that revenues were cut by $5 billion due to exchange rate effects and the impact of the strong dollar.
For the fourth quarter, a crucial period of the year for Amazon because it includes the holiday season, the company nevertheless forecasts anemic growth for its standards, between 2% and 8% over one year. The group is planning an operating profit of between 0 and 4 billion dollars, compared to 3.5 for the same period of 2021. The deceleration is already palpable for the third quarter.
The cloud comes down from its cloud
Even Amazon Web Services (AWS), the remote computing business (cloud) which has so far shown insolent growth and profitability, quarter after quarter, sees its revenues increase more moderately to 27%, against 39% one year ago.
“Macroeconomic uncertainty has led to an increase in the number of AWS customers wanting to control their costs” and thus save on their technology expenses, explained Brian Olsavsky, chief financial officer, during the conference call to present the results. .
On the other hand, the e-commerce platform has returned to the increase in its turnover, after three consecutive quarters of contraction. Another positive point is the strength of advertising, a sector in which Amazon is a relatively recent player, and which posted growth of 25% over one year, which contrasts with the difficulties of other tech giants in this market, such as Meta or Alphabet.
In addition, Amazon has seen its costs increase faster than its turnover, in particular its technological expenditure (+35% over one year), but also sales promotion and marketing (+37%). Regarding the latter, Brian Olsavsky indicated that the surge was notably due to advertising expenditure linked to the launch of the series “The rings of power” on Amazon Prime Video as well as the broadcast of matches of the American football championship NFL.
“Amazon has built a business model that is sensitive to small variations in volumes and costs,” commented Neil Saunders of GlobalData. “That shows very clearly in the results.”
“The industry is entering a new era, and (Amazon) needs to think creatively about the levers it needs to push to generate sustainable, profitable growth in the next quarter and beyond,” he added.
(With AFP)
SS – ©2022 BFM Bourse
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