Amazon Reports Third Straight $100 Billion Quarter, But Misses Revenue Target

Amazon (NASDAQ:AMZN) shares are down 7% in pre-market trading after the company reported its first revenue miss in three years and provided weak third-quarter guidance.

The company’s earnings per share came in at $15.12 U.S. compared to the $12.30 U.S. expected by analysts. For revenue, Amazon reported $113.08 billion U.S. versus $115.2 billion U.S. forecast by analysts. It was the third consecutive quarter that Amazon’s revenue exceeded $100 billion U.S.

However, Amazon still fell short of Wall Street’s expectations, and its revenue growth in the second quarter of 27% year-over-year was significantly lower than the 41% growth recorded in the second quarter of 2020.

For the current third quarter, Amazon said it now expects to book sales between $106 billion U.S. and $112 billion U.S., representing growth of 10% to 16% compared to the same period last year. That’s well below consensus estimates of $119.2 billion U.S. third quarter revenue.

Amazon’s forward guidance echoes similar warnings from Facebook and Apple, who each said in quarterly earnings earlier this week that revenue growth rates would decelerate from pandemic highs seen last year.

Amazon said its operating profit in the third quarter will be in a range of $2.5 billion U.S. and $6 billion U.S., a notably wide gap and a step down from the $6.2 billion U.S. of costs it incurred from things such as COVID-19 safety measures at its warehouses in the third quarter of 2020.

While Amazon’s second-quarter sales disappointed, the company’s earnings beat expectations, helped by its highly profitable cloud-computing, subscriptions and advertising businesses. Amazon’s “other” unit, which includes advertising, grew revenue 87% year over year during the second quarter.

Amazon Web Services (AWS) grew its revenue 37% in the second quarter, faster than 32% growth reported in the previous quarter. AWS revenue came in at $14.81 billion U.S. in the quarter, surpassing analysts’ forecast of $14.20 billion U.S.