Amazon's quarterly revenue increased 12% year over year to $201.9 billion, but this fell short of the consensus estimate of $202.3 billion. Earnings per share also missed expectations, coming in at $1.89 compared to the anticipated $1.96. The company's shares dropped approximately 6.5% in after-hours trading, following a 4% decline during the regular session.
While Amazon Web Services (AWS) reported its fastest growth rate in nearly five years at 39.3%, the overall performance was dampened by weaker-than-expected retail sales and advertising revenue. Amazon's guidance for the current quarter also missed analyst expectations, projecting net sales between $240 billion and $247 billion, with a midpoint below the consensus estimate.
Despite these challenges, AWS's growth outlook remains strong, with a backlog of $578 billion and expectations for continued revenue growth. However, the negative free cash flow of $42.4 billion and the slowdown in core retail segments raise concerns about the company's financial health.
Analysts have adjusted their price target for Amazon down to $280 from $300, reflecting shifting investor expectations amid a disappointing quarter