Amazon.com (NASDAQ:AMZN) delivered weaker guidance and missed earnings estimates as higher spending in the second quarter dented performance.
The e-commerce and cloud company forecast net sales in the range of $66 billion and $70 billion for the third quarter. Analysts were expecting revenue of $67.27 billion, according to IBES data from Refinitiv. But it guided operating income in a range of $2.1 billion to $3.1 billion, well short of estimates of $4.38 billion.
Amazon.com shares lost 2.55% in after-hours trade following the report.
The company reported earnings per share of $5.22 on revenue of $63.4 billion. Analysts polled by anticipated EPS of $5.56 on revenue of $62.47 billion.
The miss on the bottom line comes as the company ramped up spending during the quarter, with operating expenses soaring about 21% to $60.32 billion.
Amazon Web Services (AWS), the company’s must lucrative unit, saw net sales rise 38% to $8.4 billion in the quarter from $6.1 billion a year earlier. But was slower than the 42% growth recorded in the first quarter amid growing competition from Microsoft's (NASDAQ:MSFT) cloud business Azure.
Sales from Amazon's Prime Day promotion, a sales event to make up for the seasonal summer lull in shopping, surpassed the previous Black Friday and Cyber Monday sales combined, the company said.
“Customers are responding to Prime’s move to one-day delivery — we’ve received a lot of positive feedback and seen accelerating sales growth,” said Jeff Bezos, Amazon founder and CEO. “Free one-day delivery is now available to Prime members on more than ten million items, and we’re just getting started. A big thank you to the team for continuing to make life easier for customers.”
