Amazon.com Inc. AMZN-Q forecast current quarter sales below estimates, and shares fell after hours even though second-quarter profit and cloud computing sales beat Wall Street estimates.
One analyst pointed to softer retail sales as a concern.
“They’re showing continued momentum on cloud in terms of reacceleration and so that’s certainly where I think investors will be more positive, but the retail aspect is definitely what’s weighing on the stock right now,” said Charles Rogers, analyst at M Science.
Amazon’s chief financial officer Brian Olsavsky said in a call with reporters that consumers were being more cautious with their spending. “They are looking for deals,” he said, noting that lower priced products were selling briskly.
Amazon’s focus on successes in its AWS cloud computing did not cheer investors who sent shares of the Seattle-based company down 5per cent in extended trading.
Amazon shares had gained 23 per cent this year through the regular close on Thursday.
“We’re continuing to make progress on a number of dimensions, but perhaps none more so than the continued re-acceleration in AWS growth,” chief executive Andy Jassy said in a release announcing the results.
Amazon’s cloud business, Amazon Web Services (AWS), reported a 19-per-cent increase in revenue to US$26.3-billion for the second quarter, surpassing market estimates of US$25.95-billion.
Amazon’s online stores sales rose 5 per cent in the second quarter to US$55.4-billion, compared with a 7-per-cent gain in the first quarter.
The company expects revenue of US$154-billion to US$158.5-billion for the third quarter, compared with analysts’ average estimate of US$158.24-billion, according to LSEG data.