Amazon shares plummet 7% as sales grow at slowest rate since 2019

Amazon’s shares have dropped more than seven per cent in after hours trading as its first set of financial results under its new chief executive miss expectations.

In the three months to the end of June Amazon saw revenues rise 27 per cent to $113 billion, marking the third quarter in a row it has topped $1 billion.

Despite this the ecommerce giant missed consensus estimates of around $115 billion, largely due to its core retail business which grew at its slowest rate since 2019 at 15 per cent.

While profits saw healthy growth of 50 per cent to $7.8 billion, Amazon warned that profits would likely fall year-on-year in its current quarter, while estimating that operating income between July and September would come between $2.5 billion and $6 billion, down from $6.2 billion in the same period in 2020.

Aside from its core retail and logistics business, Amazon’s cloud computing arm Amazon Web Services (AWS) continued its solid performance.

READ MORE: Andy Jassy officially takes over from Jeff Bezos as Amazon CEO

AWS, the arm of which Amazon’s new chief executive Andy Jassy is credited with building, saw revenues rise 30 per cent for the second consecutive quarter to $14.8 billion.

Its advertising arm, which it lists as “other”, also posted a solid performance seeing revenues jump 88 per cent to $7.9 billion as companies piled money back into advertising as much of the west began to reopen.

While this was the last period under the stewardship of founder Jeff Bezos, who officially stepped down earlier this month, all eyes will be on Jassy and how he handles Amazon’s slowing growth in the face of easing lockdown restrictions.

Amazon’s chief financial officer Brian Olsavsky said that the widespread emergence from lockdowns meant Amazon was “seeing among our customers in especially United States and Europe, people are getting out more doing other things besides shopping”.

Jassy added: “Over the past 18 months, our consumer business has been called on to deliver an unprecedented number of items, including PPE, food, and other products that helped communities around the world cope with the difficult circumstances of the pandemic,” Jassy said in a statement.

“At the same time, AWS has helped so many businesses and governments maintain business continuity, and we’ve seen AWS growth reaccelerate as more companies bring forward plans to transform their businesses and move to the cloud.”

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