Amazon shares tumble after weak year-end forecasts

Amazon released dismal revenue forecasts for the remainder of the year, which sent its share price down as much as 20% in post-trade trading on Thursday.

The e-commerce and cloud group said it expects revenue of between $140 billion and $148 billion for the October-December period, which covers the crucial holiday shopping period. Investors were expecting more than $155 billion, according to data from S&P Capital IQ.

Amazon projected operating income for the current quarter could be between zero and $4 billion, versus analyst estimates of $5 billion.

The results are the latest in a bruising year for the company’s traditional core business of selling products online and getting them to the customer’s doorstep. Amazon’s online store quarterly revenue had been falling since late 2021.

Third-quarter revenue was $127.1 billion, up 15% from the same period last year but slightly lower than Wall Street’s expectations.

Amazon’s net income fell to $2.9 billion from $3.2 billion a year ago, and included a $1.1 billion increase in revenue from its stake in electric vehicle maker Rivian.

Its share price had already fallen 35% since the start of the year before Thursday’s earnings announcement, reflecting a broader market downturn.

Amazon’s results were the latest in a dismal week for big tech stocks, with macroeconomic pressures like inflation weighing on the sector. “These are uncharted waters for many consumers’ budgets,” said Brian Olsavsky, Amazon’s chief financial officer.

The company’s chief executive, Andy Jassy, ​​said he was “encouraged by the steady progress we’re making in reducing costs across our store service network.”

But he added: “Obviously there is a lot going on in the macroeconomic environment, and we will balance our investments to be more rationalized without compromising our key long-term strategic bets.”