Amazon (AMZN) earnings Q3 2021

Amazon shares dropped greater than 5.1% in prolonged buying and selling on Thursday after the corporate reported weaker-than-expected outcomes for the third quarter and delivered disappointing steerage for the essential vacation interval.

  • Earnings: $6.12 vs $8.92 per share anticipated, based on analysts surveyed by Refinitiv
  • Income: $110.81 billion vs $111.6 billion anticipated, based on analysts surveyed by Refinitiv

For the fourth quarter, Amazon forecast gross sales between $130 billion and $140 billion, representing progress between 4% and 12%. Analysts surveyed by FactSet had been anticipating income to rise 13.2% year-over-year to $142.1 billion.

Amazon CEO Andy Jassy mentioned the corporate expects to tackle “a number of billion {dollars}” of additional prices in its shopper enterprise within the fourth quarter on account of labor shortages, greater worker prices, world provide chain constraints and elevated freight and delivery prices. Amazon is navigating these challenges because it enters the height vacation season, he mentioned.

“It’s going to be costly for us within the brief time period, but it surely’s the appropriate prioritization for our prospects and companions,” Jassy mentioned in a press release.

The corporate has taken steps to shore up its provide chain amid the worldwide challenges, by including new delivery ports and boosting its fleet of planes and vehicles.

Amazon mentioned earlier this month it plans to rent 275,000 everlasting and seasonal workers nationwide, partly to assist cope with the vacation purchasing rush. CFO Brian Olsavsky mentioned final quarter Amazon was dealing with steep labor prices because it appears to be like to rent and retain workers, together with by doling out $3,000 sign-on bonuses and launching new perks like free faculty tuition.

Amazon mentioned its working revenue within the fourth quarter might be within the vary of $0 and $3 billion. That is a big step down from the $6.9 billion of prices it incurred from issues like coronavirus security measures within the fourth quarter of 2020.

Gross sales in on-line shops rose 3% from a yr earlier to $49.9 billion, whereas bodily retailer income elevated 13% to $4.27 billion.

Income from third-party vendor companies, which incorporates commissions on {the marketplace} in addition to achievement and delivery charges, climbed 18% to $24.25 billion, a slowdown from 34% progress within the second quarter and 60% within the first.

Amazon Net Providers topped estimates, with income leaping 39% to $16.11 billion, whereas analysts anticipated gross sales of $15.48 billion. AWS generated $4.88 billion in working earnings within the interval, whereas working revenue on the mum or dad firm was simply $880 million.

With out the hefty revenue from AWS, Amazon would have recorded a loss for the quarter.

This story is growing. Test again for updates.

WATCH: Watch Jim Cramer’s full interview with AWS CEO Adam Selipsky

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