Amazon slides on Christmas sales slowdown

A disappointing sales forecast for the Christmas season sent Amazon shares down more than 5% in after-hours trading in New York.

The online giant said it expected year-on-year sales growth of 10% to 20% for the three months to 31 December.

That would be a marked slowdown from the 29% jump in sales for the most recent quarter to $56.6bn.

Amazon also made record profits of $2.9bn in the period, compared with $256m last year.

That marked a fourth consecutive quarter of more than $1bn in profit for the Seattle-based company and came despite a 21% rise in operating expenses.

Amazon’s profit surge has been partly driven by divisions outside its extensive retail operation.

Revenue from AWS, its cloud services business, increased 46% year-on-year to nearly $6.7bn for the quarter to 30 September.

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Reuters

“Other” revenue – a category that primarily includes the firm’s advertising business – jumped 122% to almost $2.5bn.

Retail remains the firm’s biggest source of revenue, with the strongest growth in North America.

Online sales totalled more than $29bn in the quarter, 10% higher than from last year.

Its physical retail locations – most of them associated with the Whole Foods grocery chain the firm acquired last year – brought in about $4.2bn

Amazon expects sales in the fourth quarter between of $66.5bn and $72.5bn.

After ending 7% higher, shares fell more than 8% in after-hours trading in New York. Amazon stock has jumped nearly 40% this year.