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Fleetowner 39234 102519 Amazon Packages Leon Neal Getty
Fleetowner 39234 102519 Amazon Packages Leon Neal Getty
Fleetowner 39234 102519 Amazon Packages Leon Neal Getty
Fleetowner 39234 102519 Amazon Packages Leon Neal Getty
Fleetowner 39234 102519 Amazon Packages Leon Neal Getty

Amazon tumbles as profit declines for first time in two years

Oct. 25, 2019
Amazon.com Inc. reported its first quarterly profit decline in more than two years.

(Bloomberg) – Amazon.com Inc. reported its first quarterly profit decline in more than two years, missing analysts’ estimates, amid higher spending to speed package delivery. Shares fell more than 7% in extended trading.

Third-quarter earnings were $4.23 a share, compared with $5.75 in the period a year earlier, the Seattle-based company said Thursday in a statement. Analysts, on average, estimated $4.59 a share, according to data compiled by Bloomberg. Amazon projected operating income of $1.2 billion to $2.9 billion in the current quarter compared with analysts’ estimate of $4.31 billion.

Investors have been keeping a close watch on Amazon’s spending plans as the company tries to meet a pledge to expand one-day delivery for members of its Prime program and invests in more capacity for the Amazon Web Services cloud-computing group. The ramped up spending this year curbed investor enthusiasm for Amazon, whose shares had neared records as recently as July on growing profits driven by AWS, services for third-party sellers and advertising.

Amazon also is facing increasing regulatory scrutiny, as the Department of Justice and Federal Trade Commission examine the practices of the largest U.S. technology companies. Amazon has so far avoided fines of the sort levied by the FTC on Facebook Inc. and by the European Commission on Alphabet Inc.’s Google, but investors are weighing the risks should the spotlight stay on the company. President Donald Trump and Democratic presidential hopefuls alike have publicly criticized Amazon.

The company’s shares fell in extended trading after closing at $1,780.78. While the stock has gained 19% this year, it has fallen 12% since its July 15 closing high of $2020.99.

Revenue gained 24% to $70 billion in the period ended Sept. 30. Analysts projected $68.7 billion.

Net income narrowed to $2.13 billion, from $2.88 billion a year earlier, the first year-over-year decline since the second quarter of 2017.

About the Author

Matt Day

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