Amazon posted a big miss on earnings Thursday but the company’s revenue was close to what had been predicted. The results, coming off of a profitable second quarter, surprised investors and sent the stock tumbling 5% in after-hour trading.
The Seattle-based company reported earnings per share of 52 cents, versus an expected 82 cents as polled by S&P Global Market Intelligence.
Revenue was on target with predictions, coming in at $32.7 billion, versus an expected $32.654 billion.That compares with 17 cents in the year-earlier period and revenue of $25.36 billion, representing a 29% increase. Amazon’s third-quarter guidance was between $31 billion and $33.5 billion.
For the all-important fourth quarter and its holiday sales season, Amazon gave guidance of $42 billion and $45.5 billion, which would be between 17% and 27% growth compared with the fourth quarter of 2015.
Overall, Amazon shares are up 21% for the year, outperforming S&P (+6%) and Nasdaq (+9%). Amazon has risen 70% since February.
The last time Amazon missed earnings expectations was for the fourth quarter of 2015. The online retailer and cloud services company made $1 a share, less than the $1.58 per share expected by analysts.
As in past quarters, Amazon’s cloud computing division, AWS, continued to be a profit driver, with revenue of $3.23 billion, up 55% from $2.08 billion in the same quarter a year ago.
According to Synergy Research Group AWS has 31% of the cloud market, with Microsoft’s Azure running far behind at 9% and Google at 4%.
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SOURCE: USA Today, Elizabeth Weise