Amazon's net income also decreased to $2.9 billion in the third quarter, while beating analysts' average estimate of a $2.2 billion profit, according to IBES data from Refinitiv. Still, worldwide shipping costs grew 10% in the third quarter to $19.9 billion. It announced it would shut down its virtual healthcare service by year-end, and it is scaling back a long-touted effort to deliver goods via small autonomous sidewalk cars. In turn, it is hitting the broader cloud sector and companies such as AWS and Azure."įacing high inflation and receding consumer demand, Amazon's Chief Executive Officer Andy Jassy has raced to control costs across the company's vast array of businesses.Īmazon has slowed warehouse openings and refrained from filling some open positions. Paolo Pescatore, analyst at PP Foresight, said, "With so much unpredictability there is huge concern, which is impacting confidence among enterprises to invest. Net sales there grew 28% in the July-September period versus 39% a year earlier, when adjusted for changes in foreign exchange.
While it provided much-needed operating income, just like rival Microsoft's Azure cloud, Amazon fell short of estimates.Īmazon's cloud sales growth has ticked down consistently in the past year. "Big tech companies are not impervious to slowdowns in the economy, particularly if they are consumer driven," said Rick Meckler, partner at Cherry Lane Investments in New Jersey.Īmazon Web Services (AWS), the company's lucrative data-storage and computing division serving enterprises, only helped so much. consumer confidence did a U-turn in October. Results in the tech industry were just as poor this week for cloud-computing rivals Microsoft Corp and Alphabet Inc's Google, adding to recession fears. Consumer goods company Unilever PLC likewise believes "sentiment in Europe is at an all-time low," its chief financial officer said earlier. online sales are expected to rise at their slowest pace in years this holiday season. Prior holiday quarter sales growth was 9% in 2021 and 38% in 2020.Īcross the retail sector, U.S. I don't actually believe that will happen, but the market definitely doesn't like it."Īmazon forecast net sales of between $140 billion and $148 billion, or growth as little as 2% from a year earlier.
Wedbush Securities analyst Michael Pachter said, "It's possible that retail sales will decline year-over-year. While Amazon would continue to fund earlier-stage businesses like its lucrative cloud-computing and advertising divisions, it would question costs elsewhere and proceed carefully on hiring, Olsavsky said. The company's international-segment operation loss widened to $2.5 billion in the third quarter from $0.9 billion a year prior. European consumers in particular have spent less than their American counterparts, pinched by the war in Ukraine and higher fuel costs, which likewise increased Amazon's expenses, he told reporters and analysts.
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