Amazon shares dip 2% despite record quarter as it warns Christmas deliveries will be “tight”

Amazon has seen its shares dip two per cent in morning trading after it warned that its Christmas quarter could be “tight”.

The online retail behemoth spooked investors yesterday after it warned that it could struggle to meet demand for deliveries in what is set to be a record ‘Golden Quarter’.

Amid its third quarter results, Amazon predicted that its operating profits for the coming quarter would come in between $1 billion and $4.5 billion, below analyst forecasts of $5.8 billion.

While Amazon expects to surpass $100 billion in sales for the first time, predicting revenues of between $112 billion and $121 billion, its predicted lower profit margins due to skyrocketing costs related to the pandemic.

Its predicted forecast took into account $4 billion “of costs related to COVID-19” alongside mounting shipping costs, which rose by $1.4 billion in its last quarter and are now $5 billion higher than the same period a year earlier.

Despite its increased investment, Amazon’s chief financial officer Brian Olsavsky warned that the company “will be stretched”, warning that it would be advantageous “to the customer, and probably the companies, for people to order early this year”.

READ MORE: Amazon to hire 100,000 seasonal workers bringing pandemic total to over 400,000

This came as Amazon reported another record quarter, comfortably surpassing Wall Street estimates in both revenues and profits.

Between July and September Amazon reported record revenues of $96.1 billion, rising 37 per cent year-on-year and coming comfortably above analyst estimates.

Meanwhile net income jumped a whopping 71 per cent year-on-year, rising from $2.1 billion to $6.3 billion.

Rising delivery costs in its retail business were offset by its cloud computing arm Amazon Web Services (AWS) which saw revenues rise 29 per cent.

“Other” revenues, largely consisting of advertising, also rose by 50 per cent to $5.4 billion, making more money for Amazon than its entire physical store estate.

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