Bad Amazon Earnings

Amazon reports really bad earnings numbers, missing nearly every expectations. The stock is falling by over 5% in the after-market.

Here are the weak points:

Revenue: $110.81B vs $111.6B exp.

Earnings: $6.12 vs $8.92 per share exp.

Amazon's high-margin cloud computing business Amazon Web Services (AWS) revenue is growing at its fastest pace since Q1 FY 2019, generating additional costs over the short term as it faces supply chain issues, labor shortages, wage costs, and increased freight and shipping costs.

Amazon CEO Andy Jassy says the company estimates to take on “several billion dollars” of extra costs in its consumer business in the fourth quarter as a result of labor shortages, higher employee costs, global supply chain constraints and increased freight and shipping costs. Amazon is experiencing these challenges as it enters the peak holiday season, Jassy says.

It’ll be expensive for us in the short term, but it’s the right prioritization for our customers and partners,” Jassy writes in a statement.

Main issues:

Supply-chain

Staffing challenges to maintain growth

It seems that in Q4 Amazon could have up to $140 billion in sales, but thanks to surging costs, it could have $0 profit. Amazon's Q4 FY 2021 earnings report is set to be released on Jan. 31, 2022.

Shares of Amazon (AMZN) fall by 5% in the extended trading, dragging U.S. futures in Asia sessions.

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