Amazon’s revenue grew at its slowest pace in six years during the third quarter, and the company warned that growth could slow further in the remainder of the year as it will face the rising cost of keeping its logistics empire operating full steam ahead.
The retail and cloud computing giant’s overall revenues were $110.8 billion (BRL 621.84 billion) in the quarter, up 15% from the same period in 2020, but representing its pace of growth more slow since 2015. Analysts’ projection was for revenues of US$111 billion (R$626 billion).
Net income fell by almost 50% year-on-year to $3.2 billion (R$17.9 billion). Amazon shares fell more than 5% in trades after markets closed.
In its projections for the current quarter, Amazon announced it anticipated an even greater slowdown in revenue growth, telling investors that it expects revenues 12% higher than last year’s holiday season at best. , and only 4% increase in the worst. at worst, the increase would be only 4%.
Profit for the period could fall between zero and US$ 3 billion (R$ 16.8 billion), the company said, compared to US$ 6.9 billion (R$ 38.7 billion) in 2020.
The pattern confirms alerts released by the company months ago when it announced it would have difficulty repeating its 2020 performance, the year in which a surge in online shopping resulted in record revenue. The impact of the pandemic was somewhat reduced, and societies began to function again.
Amazon is also facing rising costs to expand its distribution networks, as well as to hire and retain personnel to operate them.
Earlier this month, Amazon announced it planned to hire an additional 150,000 seasonal workers to handle the US holiday season — 50,000 more than it had to hire last year.
“We’ve always said that, faced with a choice between optimizing for short-term profits or doing what’s best for consumers in the long run, our choice would be second, and that’s something that can be seen in the current phase of the pandemic “said Andy Jassy, ​​the chief executive of Amazon. This quarter was his first in charge of the retail giant, after he replaced Jeff Bezos at the post in July.
Amazon’s third-quarter strength was AWS, its cloud computing division, which once again performed strongly, with revenue of US$16.11 billion (R$90.4 billion), compared to expectations of US$ 15.5 billion (R$ 87 billion). The division once again accounted for the bulk of Amazon’s overall profit, with operating profit of $4.88 billion (R$27.4 billion), or 40% more than last year.
Translation by Paulo Migliacci
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