Amazon.com Inc’s sales projections for the crucial holiday quarter disappointed Wall Street and third-quarter results missed forecasts, sending the online retailer’s shares 9 percent lower on Thursday.<\/p>\n
After an unusually busy first half of the year that saw the online retailer spend on developing everything from mobile phones and Hollywood-style production to grocery deliveries, investors were ready to see it curtail its ambitions and start delivering sustainable profits.<\/p>\n
But not only did it post a much larger loss than expected, Amazon also projected 7 to 18 percent revenue growth over the busiest shopping period of the year, a far cry from the 20 percent-plus pace that had convinced investors to overlook its persistent lack of profit in the past.<\/p>\n
“That kind of takes the topline growth story off the table. And now they’ve got to deliver on profit margins,” said Rob Plaza, senior analyst at Key Private Bank.<\/p>\n
“Because of all that money they need to spend to drive growth, it becomes an expensive proposition.”<\/p>\n
Thursday’s after-hours share losses wipe more than $15 billion off of Amazon’s market value. The stock had already been down 13 percent since Amazon’s last quarterly results announcement in July, when it also missed targets and ignited a debate about its free spending ways.<\/p>\n
Some analysts fear that the U.S. holiday shopping season, the biggest quarter for most retailers, might turn out weaker than anticipated.<\/p>\n
Amazon projected on Thursday net sales of between $27.3 billion and $30.3 billion for the holiday quarter, lagging the $30.89 billion analysts had expected on average.<\/p>\n
Chief Financial Officer Tom Szkutak told reporters a stronger dollar had reduced its fourth-quarter revenue forecast by about 2.5 percentage points. A stronger dollar means overseas revenue translates to less in the home currency.<\/p>\n
He added that Amazon sales in Japan in the third-quarter failed to recover from their second-quarter decline.<\/p>\n
The earnings report comes about a week after e-commerce rival eBay Inc trimmed its own full-year revenue outlook due in part to the stronger U.S. dollar.<\/p>\n
For the just-finished third quarter, Amazon missed on virtually every metric that Wall Street tracks.<\/p>\n
Its third-quarter net loss widened to $437 million or 95 cents per share in the third quarter, from $41 million a 9 cents a year ago. That came in larger than forecasts for a loss of 74 cents a share.<\/p>\n
Revenue also fell short of expectations. Net sales rose to $20.58 billion, but that lagged forecasts for $20.84 billion, according to Thomson Reuters I\/B\/E\/S.<\/p>\n
Shares in the company slid more than 9 percent to $284 in extended trade.<\/p>\n
“It was an ugly quarter,” Plaza said.<\/p>\n
Amazon targets services marketplace<\/strong><\/a><\/p>\n