Amazon's second-quarter sales fall short of analyst predictions. Sales growth is also expected to slow down for the second half of the year.
As it closed its second-quarter sales, the e-commerce giant showed disappointing results. According to CNN Business, Amazon earned $113.1 billion in revenue and an increase of 27 percent from the same period a year prior. However, the company fell short of the $115.2 billion analysts predicted that it would earn in the period.
Amazon also forecasted weaker sales growth for the upcoming quarter. Compared to the 37 percent sales growth from last year, net sales are predicted to increase between 10 to 16 percent. Investors are warned that trading profits might also slow down moving forward.
Amazon Stock Price Today
Amazon shares (AMZN) reportedly fell more than 7% in the after-hours trading, costing more than $100 billion loss in the company's market value. At the time of writing, Market Watch listed AMZN with a $3331.00 per share trading value.
Financial Times highlighted Amazon's earnings for Q2, which are listed with their actual value versus analyst estimates.
As previously mentioned, revenue earned was $113.1 billion compared to analyst prediction of $115.1 billion.
Net income for the company, including "other" business sectors (like company advertising efforts), earned $7 billion compared to $6.4 billion estimations.
Company earnings per share are estimated to be at $15.12 compared to the $12.32 prediction.
Notably, Amazon earned profits in this quarter. However, the company seemingly lost its momentum for rapid growth and sales.
Earnings Fall Short of Forecast, Slow Growth Coming
Earlier this month, Jeff Bezos passed his Amazon CEO position to the longtime head of the company's cloud computing division, Andy Jassy. Many skeptics wondered if Jassy could maintain Amazon's remarkable sales and profit growth. However, circumstances proved to be complicated, particularly because lockdown restrictions have recently been loosened.
Amazon, with its core business in the online store industry, would face the "loss of demand" for online shopping,
Back in 2019, Amazon had record-level surges in sales. Since physical stores for non-essential products like clothing are temporary or permanently closed. This momentum carried over until the first few months of this year.
However, the growth rate slowdown became evident during the Amazon Prime Day sales in June. Typically, many online shoppers take advantage of Amazon Prime Day for its significant discounts and affordable prices. Instead, profits for the company were extremely slow, as listed above.
This trend, unfortunately, might continue in the next few months.
Bad News to Amazzon Investors
Investors need to be careful when trading with Amazon stocks in the coming days. While market trends are unpredictable and profits are still being made by Amazon, money might come in at a snail's pace.
Between environmental circumstances and a new hierarchy being established on Amazon, market growth would be comparably weaker than last year. No updates or solutions have been made for Amazon's market recovery.
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