Bad News For Amazon As Q3 Earnings Report Fails To Meet Expectations With Shares Dropping 13%

Amazon just published its earnings report for Q3 and it wouldn’t be wrong to say that the results are disappointing, to say the least.

Not only did the values fail to meet the predictions of analysts, but the company also witnessed its stocks drop by 13%. And just in case that was not bad enough, the picture for the future also doesn’t seem to be too great. The company forecasted more dropping sales in Q4 of this year.

The figures for earnings stood at 28 cents per stock while revenue generated was roughly $127 billion. Meanwhile, Amazon Web Services failed to meet its target and could only reach $20.5 billion. Advertising was also down to $9.55 billion.

Therefore, the tech giant predicted the revenue for the upcoming quarter to lie between $140-$148 billion. And this stands for YoY growth of nearly 2 to 8%. But experts predicted the company’s sales to secure at least $155 billion.

There was growth in revenue which managed to reach 15% in Q3 and that signaled the firm’s return to the much-anticipated double-digit value for sales expansion. Still, it really fell short of the forecasts made by analysts.

Similar to other tech giants in the industry, it’s been a tough year for Amazon as it is forced to confront some huge macroeconomic headwinds. This coupled with the problem of inflation and soaring interest rates didn’t make it easier for the company to perform well. The challenges were aligned with the corporation’s main retail business as so many consumers got back to shopping in stores as compared to the convenience of online purchasing.

This is not the first time that the company has seen a lot of disappointment in its results. In fact, it’s the second time that we’re witnessing selloffs in double digits. In the month of April, we saw some really weak forecasts take center stage during Q2 where shares fell by 14%.

The CEO was seen taking assistance from billionaire Jeff Bezos in terms of advice on what to do next. Hence, they opted to cut down immensely on costs due to the rising expenses. The cut in costs was seen all across the board and that means all divisions were included in the change. Similarly, the company stopped hiring for positions in its corporate division while experimental trials were also frozen. Amazon also bid farewell to its telehealth service.

The CEO’s response to the disappointment was also revealed recently when he spoke about the great economic downturn and how it just made the whole business environment so much more unpredictable.

They hope to balance it out more in the future with better investments and no compromises on their key targets. Meanwhile, the firm’s CFO says Amazon really cut back on capital-related expenses for 2022 where budgets underwent massive reductions in the past to make changes for the greater demand in the pandemic.

Now, it’s a whole different ballgame and the company is really tightening its stronghold on things like hiring in certain firms and also shutting down projects so that its funds can be utilized in places that matter the most and bring out the greatest returns.

There was some emphasis on how the current economic downturn in Europe was worst than the picture seen in the North American continent. And a lot of that had to do with the war and current energy issues taking center stage.

With such a disappointing forecast, the company is not expecting a lot for the upcoming holiday season. Sales from online purchases are now predicted to increase by only 2.5%.

Read next: Apple Publishes Its Earnings Report For Q4 Of 2022 As Revenue Reaches $90 Billion With Profits Worth $20 Billion
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