The third quarter results late on Thursday was the second time running that billionaire Jeff Bezos' firm had fallen short of Wall Street's lofty sales targets, and the numbers sent a shockwave reverberating through global stock markets.
But the company's revenue for the period was lower than expected, and it offered a disappointing revenue forecast for the fourth quarter. If they can continue to grow its cloud, advertising, and subscription services, its margins will continue to improve and given Amazon's massive revenue, this is a good recipe for mega profits down the line.
Meanwhile, in Amazon's North America segment, net sales in Q3 came to $34.35 billion, up 35 percent year-over-year.
Amazon said that revenues in the third quarter of the year had risen by 29pc to $56.6bn (£44.2bn), while the company recorded a leap in profits, from $256m a year ago to $2.9bn. But overall, Amazon stock is still up more than 49% this year. Analysts had previously forecast it would earn $US5.79 a share in the quarter.
Amazon also is investing in physical stores and the pharmacy business. Amazon has already committed to invest at least $5 billion in India, and is expected to commit even more investments towards India, where it is now locked in a bruising market share battle against local rival and Walmart-backed Flipkart.
As well, Amazon expanded its Prime Video product with new original shows, launched its Prime Book Box to all of its US-based Prime customers, setup shop in Turkey, improved Alexa, and much, much more. Since the end of September, analysts have cut their 2019 revenue estimates by 1%. In addition, Amazon faces a tougher year-over-year comparison because the Whole Foods deal closed in the third quarter of 2017, and the different timing of the holiday Diwali affected sales patterns, he said.
"Shares are up 52% YTD, hence this kind of "growth scare" is likely to weigh on sentiment in the near term, but ultimately will work itself out (likely by 1Q19)", Barclays analyst Ross Sandler wrote in a client note. That division saw sales jump 35% to $US34.3 billion.
Sales increased 29.33 percent from the third quarter of 2017.
The company now groups its advertising group under "other" on its balance sheet. On a call with reporters, Amazon CFO Brian Olsavsky said about 400,000 employees will be affected by a promise made last month to bump the company's minimum wage to $15 an hour for all employees, including part-time and seasonal workers.
As of this writing, Amazon shares are rising almost 7% to $1,783.