Amazon projects holiday season sales below Wall St. targets

 Amazon projects holiday season sales below Wall St. targets

By Jeffrey Dastin and Arjun Panchadar

(Reuters) - Inc forecast disappointing holiday season sales on Thursday, projecting its fourth-quarter revenue growth would be the slowest in years, sending shares of the online retailer down 6 percent in after-hours trade.

Third-quarter sales also missed analyst estimates, and Amazon forecast operating income for the fourth quarter below estimates.

The outlook marks a potential change for Amazon, which has posted consistent and strong revenue increases for years.

The retailer is preparing for its busiest time of year, the holiday shopping season that runs from around the U.S. Thanksgiving holiday in late November through New Year's. It forecast that fourth-quarter sales will rise between 10 percent and 20 percent, or up to $72.5 billion. Analysts were expecting $73.9 billion, according to Refinitiv data.

That would be Amazon's lowest quarterly sales growth since at least the start of 2016.

Amazon forecast operating income between $2.1 billion and $3.6 billion, below the $3.87 billion expected by analysts, according to FactSet.

Amazon's chief financial officer, Brian Olsavsky, told reporters on a call that the company expected a strong holiday season.

For the third quarter, net sales rose to $56.58 billion from $43.74 billion a year earlier, but missed analyst estimates of $57.1 billion, according to Refinitiv data.

Amazon's net income rose to $2.88 billion, or $5.75 per share, in the third quarter ended Sept. 30, from $256 million, or 52 cents per share, a year earlier.

Total operating expenses surged 21.8 percent to $52.85 billion as the company invests heavily in its Prime program, grocery delivery from Whole Foods stores and the creation of original video content.

Revenue from Amazon Web Services, the company's fast-growing cloud services business, surged 45.7 percent to $6.68 billion, narrowly edging past estimates of $6.67 billion.

Shares of Amazon were trading down at $1,674.12.

(Reporting by Jeffrey Dastin in San Francisco and Arjun Panchadar in Bengaluru; Editing by Leslie Adler)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date: Oct 26, 2018 04:05:14 IST