Amazon forecast for holiday seasons disappoints as investment rises | Reuters

By Jeffrey Dastin and Anya George Tharakan Amazon.com Inc (AMZN.O) provided a disappointing forecast for the holiday season quarter while posting earnings that missed Wall Street estimates in the third quarter, as it invested heavily on shipping, video offerings and other projects, sending its shares down nearly 5 percent.Investors and analysts are trying to gauge how much more Amazon plans to invest in its various ventures, and it unnerved some that it offered wide ranges in its outlook.'Amazon really doesn't know what's going to happen this quarter,' said analyst Jan Dawson of Jackdaw Research, noting investors disapproved of the 'uncertainty' in the company's guidance.Amazon forecast net sales of between $42 billion and $45.5 billion for the current-quarter, which includes the all-important holiday shopping season.The $43.75 billion midpoint of the outlook trailed expectations of $44.58 billion, according to Thomson Reuters I/B/E/S, and Amazon also forecast that operating income would range from nothing to $1.25 billion.'At the high end of their operating profit guidance, the Street is still $250 million above them,' said Michael Pachter, analyst at Wedbush Securities.Amazon Chief Financial Officer Brian Olsavsky told reporters that new warehouses and spending on video drove up third-quarter costs. 'There’s a lot of hiring to support the projects we’re investing in,' he said.Total operating expenses rose 31.5 percent to $10.94 billion, including investments in Amazon Web Services and the Prime subscription programme internationally.Amazon posted net income that rose to $252 million, or 52 cents per share, from $79 million, or 17 cents per share, a year earlier. It was company's sixth straight profitable quarter.But earnings per share were far short of the average estimate of 78 cents, according to Thomson Reuters I/B/E/S.

Reuters October 28, 2016 03:00:06 IST
Amazon forecast for holiday seasons disappoints as investment rises
| Reuters

Amazon forecast for holiday seasons disappoints as investment rises
 Reuters

By Jeffrey Dastin and Anya George Tharakan

Amazon.com Inc (AMZN.O) provided a disappointing forecast for the holiday season quarter while posting earnings that missed Wall Street estimates in the third quarter, as it invested heavily on shipping, video offerings and other projects, sending its shares down nearly 5 percent.Investors and analysts are trying to gauge how much more Amazon plans to invest in its various ventures, and it unnerved some that it offered wide ranges in its outlook."Amazon really doesn't know what's going to happen this quarter," said analyst Jan Dawson of Jackdaw Research, noting investors disapproved of the "uncertainty" in the company's guidance.Amazon forecast net sales of between $42 billion and $45.5 billion for the current-quarter, which includes the all-important holiday shopping season.The $43.75 billion midpoint of the outlook trailed expectations of $44.58 billion, according to Thomson Reuters I/B/E/S, and Amazon also forecast that operating income would range from nothing to $1.25 billion."At the high end of their operating profit guidance, the Street is still $250 million above them," said Michael Pachter, analyst at Wedbush Securities.Amazon Chief Financial Officer Brian Olsavsky told reporters that new warehouses and spending on video drove up third-quarter costs.

"There’s a lot of hiring to support the projects we’re investing in," he said.Total operating expenses rose 31.5 percent to $10.94 billion, including investments in Amazon Web Services and the Prime subscription programme internationally.Amazon posted net income that rose to $252 million, or 52 cents per share, from $79 million, or 17 cents per share, a year earlier. It was company's sixth straight profitable quarter.But earnings per share were far short of the average estimate of 78 cents, according to Thomson Reuters I/B/E/S.

Amazon said earlier this month it would hire more than 120,000 seasonal workers in the United States for the holiday season, 20 percent more than last year, highlighting the growing threat the company poses to traditional retailers. The company reported a 29 percent rise in quarterly revenue, in line with expectations, boosted by a big jump in sales from its Prime Day annual shopping festival, strong back-to-school shopping and its market-leading cloud services business.The world's biggest online retailer said its net sales rose to $32.71 billion in third quarter ended Sept. 30 from $25.36 billion a year earlier.Amazon said in July that customers placed 60 percent more orders worldwide in its second Prime Day sale. It did not provide sales figures at the time.

Revenue from Amazon Web Services, the company's cloud services business, surged 55 percent to $3.23 billion, beating the average estimate of $3.19 billion, according to market research firm FactSet StreetAccount.Long known for heavy spending and losses, Amazon has found consistent profit from selling computer storage and services in the cloud.The meteoric rise in sales in the market-leading business reflects how companies globally are turning to Amazon and Microsoft Corp (MSFT.O) to host their data, leaving once critical software programs and hardware in the dust.Amazon's net sales in North America, its biggest market, jumped 25.8 percent to $18.87 billion in the latest quarter.Up to Thursday's close of $818.36, Amazon's shares had risen 21.1 percent this year. They were down to $779 in after-hours trade. (Reporting by Anya George Tharakan in Bengaluru; Writing by Peter Henderson; Editing by Ted Kerr)

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

Updated Date:

also read

Indian economy well cushioned to absorb Fed rate hike impact - Subramanian
| Reuters
Fwire

Indian economy well cushioned to absorb Fed rate hike impact - Subramanian | Reuters

NEW DELHI The Indian economy is "well cushioned" to absorb the impact of U.S. Federal Reserve's rate hike, the chief economic adviser at the ministry of finance Arvind Subramanian said on Thursday, amid fears of capital outflows from India.India is seen as better equipped than its other emerging market peers to weather the impact of higher U.S. interest rates because of its stronger economic growth and record high foreign exchange reserves of more than $300 billion.

This is rage against the machine: voters reject a rigged system
| Reuters
World

This is rage against the machine: voters reject a rigged system | Reuters

By Michelle Conlin and Andy Sullivan | WASHINGTON WASHINGTON In the 2008 U.S. election, Carrie Sheridan slept in her Honda Element as she campaigned across the country for Democrat Barack Obama. On Tuesday, the self-described community activist from the Washington, D.C

Aleppo's fall would be win for Russia, defeat for U.S. in Mideast
| Reuters
Fwire

Aleppo's fall would be win for Russia, defeat for U.S. in Mideast | Reuters

By Jonathan Landay and Arshad Mohammed | WASHINGTON WASHINGTON U.S.-backed moderate rebels' loss of the eastern half of Syria's largest city Aleppo to Russian-backed government forces would be a defeat for President Barack Obama's efforts to promote democracy and defeat terrorism in the Middle East, U.S. officials conceded on Monday.Their grim assessment reflected the expectation that the last rebel-held districts of Aleppo, where tens of thousands of civilians are trapped, will soon fall to the Syrian Army supported by Russia, Iran, and Shiite Muslim militias from Iraq, Lebanon and elsewhere."The fall of eastern Aleppo will confront the United States with the reality that supporting a moderate opposition with any hope of becoming the future government of Syria is no longer a hope," said Paul Pillar, a former senior U.S. intelligence analyst