Amazon's fourth-quarter revenue forecast falls short of estimates; shares drop after hours

Centre · 1Amazon.com forecast fourth-quarter revenue largely below Wall Street estimates on Thursday 29 October, raising concerns about muted retail demand over the holiday season. 1 Centre · 1The company expects revenue of $240.0 billion to $247.0 billion, against analysts' average estimate of $244.51 billion, according to LSEG data. 1 Mixed · 2CNA reported that shares fell more than 7 per cent in extended trading, while Variety said the stock was down 4% after the market close; the two figures may reflect different moments in after-hours trading. 1 2

Left · 1For the third quarter, Amazon reported $201.9 billion in net sales and diluted earnings per share of $1.89, against analyst expectations of $202.31 billion and $1.96, per LSEG. 2 Mixed · 2Amazon Web Services revenue rose 39% to $46 billion, ahead of the 38.2% rise to $45.61 billion analysts expected and up from 37% in the second quarter. Both outlets describe it as the fastest growth in nearly five years. 1 2 Left · 1Advertising revenue growth slowed to 12%, from 26% in the second quarter. Amazon attributed this to holding Prime Day in the second quarter for most larger countries and to foreign exchange changes. 2

Centre · 1Amazon maintained its annual capital spending forecast of about $220 billion as it builds data centres to compete in AI. 1 Left · 1CEO Andy Jassy said AWS investment is working, with projected growth of over 40% in both 2027 and 2028, and that broader selection and faster delivery are winning retail market share with improving margins. 2 Centre · 1CNA places the outlook against pressure on consumers from higher gas prices and living costs, though it notes the National Retail Federation predicted a 4.2 per cent rise in US holiday sales. 1