Amazon issued bleak revenue forecasts for the remainder of the year, sending its stock price tumbling 20 per cent in after-hours trading on Thursday.
The ecommerce and cloud group said it expected revenue of between $140bn-$148bn for the October to December period. Investors had been expecting more than $155bn, according to data from S&P Capital IQ.
Revenue in the third quarter came in at $127.1bn, up 15 per cent on the same period last year, but slightly softer than Wall Street’s expectations.
Amazon’s net income fell year-on-year to $2.9bn compared with $3.2bn a year ago and included a $1.1bn boost in non-operating income from its stake in electric vehicle maker Rivian.
The results are the latest in a bruising year for the company’s traditional core business of selling products online and getting them to customer’s doorsteps. Quarterly revenue for Amazon’s online store had been declining since the end of 2021.
Its stock price had already fallen by 35 per cent since the start of the year, reflecting a broader market downtown.
Chief executive Andy Jassy said he had been “encouraged by the steady progress we’re making on lowering costs in our stores fulfilment network”.
But he added: “There is obviously a lot happening in the macroeconomic environment, and we’ll balance our investments to be more streamlined without compromising our key long-term, strategic bets.”
While not announcing a large-scale hiring freeze or sweeping cuts, Amazon has slowed hiring in some units, and in recent weeks moved to close underperforming or experimental projects, such as its delivery robot concept, Scout.
It has also reined in logistics costs after executives admitted earlier this year they had overexpanded on warehouse leases and other infrastructure investments.
However, spending has continued apace in its priority areas, such as acquiring sports and entertainment content for its Prime Video service, and building out its healthcare operation. In July, Amazon announced it would acquire primary care provider One Medical in a deal worth $3.9bn.
Earlier on Thursday, Amazon ecommerce rival Shopify beat analysts’ expectations, posting a 22 per cent rise in revenue, year-on-year, for the third quarter.
Shares of the Canadian group, which provides a software platform for online retailers, jumped by 17 per cent in Thursday’s trading, despite warnings that a strong US dollar and other macroeconomic pressures would be a drag on consumer spending.
