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Amazon revenue shows a sharp slowdown in e-commerce

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Shares have fallen in trading late Thursday after e-commerce and cloud computing giants reported Mixed result In the June quarter, profits were higher than expected, but sales were shy. Wall Street Quote..

This mistake reflects Amazon’s shortage of e-commerce business, which has suffered a sharp slowdown due to recent growth trends. The slowdown in e-commerce was partially offset by better-than-expected results in the company’s cloud computing, advertising, and third-party seller segments.

Amazon (ticker: AMZN) revenue for the quarter was $ 113.1 billion, up 27% year-on-year and up 24% after currency adjustment, in the middle of the company’s guidance range of $ 110 billion to $ 116 billion. .. A little shy at the $ 115.4 billion consensus on Wall Street. Revenue was $ 15.12 per share, well above analysts’ forecast of $ 12.28 per share. Operating profit was $ 7.7 billion, approaching the company’s forecast range of $ 4.5 billion to $ 8 billion, just below Wall Street’s consensus of $ 7.8 billion.

Revenues from online stores were $ 53.2 billion, up 16% from a year ago and 13% when adjusted in currency. This is well below the street consensus forecast of $ 57.3 billion. This was down from 41% growth in the March quarter and 49% growth a year ago.

Amazon Chief Financial Officer Brian Orsavsky called an analyst and said that since May, the company’s growth, excluding Prime Day, has grown in the recent 35% to 40% range, and in March. He said he had fallen into his mid-teens from 44% growth. quarter. The company expects growth in the 10% to 16% range in the September quarter.

In addition to a rigorous comparison from a year ago, Orsavsky pointed out that increased availability of vaccines and consumer departures are the factors behind the slowdown.

Orsavsky added that the company expects a “difficult comp pattern” to continue in the coming quarters until the end of the pandemic period.

Third-party service revenue was $ 25.1 billion, up 38%, or currency-adjusted 34%, above the consensus forecast of $ 24.8 billion. Still, it was a slowdown from 60% in the March quarter to 53% a year ago.

The company’s cloud business, Amazon Web Services, reported revenues of $ 14.8 billion, up 37%, well above Street’s estimate of $ 14.3 billion, 32% growth in March and 29% growth a year ago. Is accelerating from.

“Other” revenue, primarily $ 7.9 billion in advertising, increased 87%, or 83%, on a currency-adjusted basis, well above the consensus of $ 7 billion, in line with recent strong advertising data.

Facebook,

Alphabet and other ad-driven businesses. In-store revenue increased 11% to $ 4.2 billion, surpassing Street View’s $ 3.9 billion.

North American sales growth, excluding the effects of foreign exchange, slowed from 39% in March and 44% a year ago to 21% in the quarter. The operating margin in North America was 4.7%, down from 5.4% in March, but up from 3.9% a year ago. Overseas sales increased 26% from 50% in the March quarter, down from 41% in the year-ago quarter.

Amazon forecasts September quarter sales of $ 106 billion to $ 112 billion, below the street consensus of $ 118.6 billion, and operating profit ranging from $ 6.2 billion to $ 2.5 billion to $ 6 billion in the previous year. did. According to the company, the guidance estimates that the costs associated with Covid-19 will be approximately $ 1 billion.

Amazon stocks fell 7.1% in the second half of the transaction. Inventories increased 11% in 2021

S & P 500

18% gain.

Write a letter to Eric J. Sabitz eric.savitz@barrons.com

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