Home Business News Amazon posts bumper revenues but analysts expect more

Amazon posts bumper revenues but analysts expect more

by LLB Reporter
26th Oct 18 7:52 am

Amazon delivered revenue growth of 30% at constant exchange rates in its third quarter, taking the top line to $56.6bn. However, that’s behind forecasts for a shade over $57bn.

In addition, the group has guided investors to expect sales in Q4 to be between $66.5bn and $72.5bn. That’s well behind prior expectations of $73.9bn, although it does factor in unfavourable exchange rate movements.

Operating income increased to $3.7bn, compared with $347m in Q3 last year, driven by strong growth in AWS and the North American retail division.

The shares fell 8.7% in after hours trading, more than erasing gains of 7% from earlier in the day.

George Salmon, Equity Analyst at Hargreaves Lansdown:

“These results contained the usual roll-call of successes around Prime, Alexa and AWS milestones, but the weak revenue growth stuck out like a sore thumb. It was particularly disappointing to see expectations for the fourth quarter come in on the light side too. The Christmas quarter is, after all, the most lucrative time of the year.

However, investors shouldn’t forget Amazon is, despite its c.$800bn market cap, to all intents and purposes a highly rated growth company. And when you’re trading on 70 times expected earnings, it doesn’t take much to jolt the share price.Hi

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