Amazon’s stock dropped nearly 10% in after-hours trading on Thursday, after the e-commerce giant fell short of its third quarter earnings estimates as it continues to expand its Prime 1-day shipping program.
Amazon’s shipping costs, due in part to its 1-day shipping plan, jumped 46% from the same time last year to $9.6 billion — marking a significant year-over-year jump from the previous quarters.
The Seattle-based company posted revenue of $70 billion, marking a 24% year-over-year increase in sales and topping analyst estimates of $68.8 billion in the process. Its earnings per share of $4.23 failed to meet Wall Street’s expectations of $4.60 EPS, however, as Amazon’s profit fell more than 25% year-over-year to $2.1 billion.
Amazon’s stock price dropped 9% soon after its Q3 report was posted, hitting $1,625 per share.
Perhaps the biggest contributor to the after-hours drop was Amazon’s lighter-than-expected Q4 guidance. Amazon projected sales of $80 billion to $86.5 billion for the always-critical holiday season — coming about $1 billion short of what Wall Street anticipated.
Amazon chief Jeff Bezos, in the company’s letter to shareholders, said customers “love” the move from 2-day to 1-day shipping and have “already ordered billions of items with free 1-day delivery this year.” He added the “big investment” is the “right long-term decision for customers.”
Amazon’s cloud business increased 35% year-over-year, accounting for $9 billion in sales, slightly missing on analyst estimates.
On the Hollywood front, Amazon boasted it won 15 Emmy awards during the quarter, including having “Fleabag” take home the win for Outstanding Comedy Series.
Read original story Amazon’s Stock Sinks 9% After E-Commerce Giant Misses on Q3 Earnings At TheWrap