Amazon dips as tepid profit forecast overshadows 3rd-quarter earnings blowout
- Shares of Amazon dipped 2% during premarket trading on Friday after the e-commerce giant said its fourth-quarter profit would likely fall below Wall Street's estimate.
- The profit estimate overshadowed Amazon's blowout third-quarter earnings; its sales growth skyrocketed 37%, and revenue beat expectations.
- Amazon said its fourth-quarter operating profit would fall between $1 billion and $4.5 billion, below the $5.81 billion Street estimate, as COVID-19-related costs pile up.
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Amazon dipped as low as 2% in premarket trading on Friday after its fourth-quarter profit estimate disappointed investors and overshadowed its better-than-expected third-quarter earnings results.
The e-commerce giant shattered third-quarter earnings expectations, reporting earnings per share of $12.37 versus the $7.41 estimate. Amazon also reported $96.1 billion ($92.71 billion expected) in revenue and sales growth of 37%.
But Amazon said its operating profit would likely drop in the fourth quarter, as it expects to spend roughly $4 billion on costs related to COVID-19.
Amazon said its operating profit in the fourth quarter would fall between $1 billion and $4.5 billion, below the $5.81 billion Street estimate.
Amazon also reported on Thursday that its Amazon Web Services had $11.6 billion in sales in the third quarter, in line with Street expectations. Physical-store sales dropped 10%, to $3.78 billion, while Amazon's advertising business reported $5.4 billion in sales.
The third quarter was the first time Amazon's employee count crossed the 1 million mark. The e-commerce giant now has 1.13 million employees, a 50% increase from last year.