Net profit plummets 50%! Amazon's revenue is lower than expected

Today, Amazon announced its third-quarter financial results. Affected by multiple factors, Amazon delivered a less than satisfactory answer sheet, with revenue data lower than expected and net profit also falling sharply.

The COVID-19 pandemic has continued to affect Amazon's development like a double-edged sword. On the one hand, due to the surge in consumer demand for online shopping, Amazon's net sales in the third quarter increased by 15% year-on-year to $110.8 billion ; on the other hand, the increase in logistics, production, recruitment and other costs caused by the pandemic caused Amazon's net income in the third quarter to drop by nearly half, from $6.3 billion in the same period last year to $3.2 billion .

It is reported that Amazon's service revenue exceeded its retail sales for the first time in history. Amazon's net product sales this quarter were $54.9 billion, while revenue from Amazon Web Services, advertising, third-party seller services, and Prime subscriptions totaled $55.9 billion.

Among them, the revenue of Amazon's cloud computing network service exceeded expectations. In the third quarter, Amazon's cloud computing service revenue increased by 39% year-on-year to US$16.11 billion, generating an operating profit of approximately US$4.88 billion. Without the huge profits from cloud computing network services, Amazon would have incurred losses this quarter. In addition, the advertising business also achieved a 50% sales growth in the third quarter.

Amazon expects fourth-quarter sales to be between $130 billion and $140 billion, a 4% to 12% increase from the same period last year .

However, due to a series of problems including labor shortages, rising employee costs, global supply chain constraints and increased shipping and transportation costs , Amazon expects fourth-quarter profits to be between $0 and $3 billion , far below the same period last year.

Amazon CEO Andy Jassy said that due to the above reasons, Amazon expects to incur "billions of dollars" in additional costs in its consumer business in the fourth quarter . At the same time, Chief Financial Officer Brian Olsavsky said that labor costs in the fourth quarter will increase by an additional $4 billion.

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