Amazon posted third-quarter results below analyst expectations in its earnings report on Thursday and forecast fourth-quarter net sales of $240bn to $247bn, first reported by Theguardian. After the earnings report was released on Thursday, shares were down more than 6% in after-market trading as investors focused on Amazon’s core business.
Sales at AWS, Amazon’s cloud computing unit, rose 39.3% in the quarter ended 30 September, up from 37% in the previous quarter. Amazon said that was the unit’s fastest growth rate in nearly five years.
Amazon reported net income of $20.69bn, or $1.89 per share, compared with $21.19bn, or $1.95 per share, a year earlier. Sales rose to $201.94bn from $180.17bn; analysts had expected $1.97 per share on $202.2bn in sales.
Amazon forecast fourth-quarter net sales of $240bn to $247bn, a 12% to 16% increase from a year earlier. Analysts expected $244.16bn, and the forecast covers the critical holiday shopping period.
The quarter paired faster AWS growth with lower net income than a year earlier.
Investors have also been watching whether Amazon’s spending on artificial intelligence is starting to pay off. CEO and president Andy Jassy said in July that Amazon expected capital spending, mostly on AI, to total $220bn for this fiscal year. That figure includes outlays on robots, semiconductors and satellites.
The $220bn figure is up from the $200bn investment plan announced in February and well above the $128bn in capital spending for all of last year. Jassy cited higher memory-chip costs as the main reason for the increase.
Jassy told investors this past summer that even at $220bn, Amazon would not have enough capacity to meet all of its customers’ demands this year.