Amazon shares sink on growth worries
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Shares of Amazon fell after its sales outlook missed Wall Street targets, fanning concerns that the online retailer's expansion may finally be losing steam.
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UNITED STATES (REUTERS) - Shares of Amazon plunged after its revenue, holiday season sales and profit outlook missed Wall Street targets.
The company beat estimates when it reported third-quarter earnings last Thursday (Oct 25) after the bell.
Its total revenue rose 30 per cent from last year. Its net income grew more than ten-fold.
Other parts of the company, such as advertising and Amazon Web Services, also did well. But investors read the fourth-quarter guidance as a hint that Amazon could have a disappointing holiday season, a crucial time for any retailer.
"The shares are simply reacting to what could be a new reality for Amazon, which is that for years, the company has been growing at a breakneck pace for revenue. Its profit was up and down, but revenue was always a bright spot. And now, the company has forecast... revenue below what Wall Street was expecting for the holiday quarter, which is typically its biggest quarter, and it came in light for the third quarter that just ended, so they're wondering, is this the start of something new and something bad," said Reuters correspondent Jeffrey Dastin.
Google's parent Alphabet also tanked after reporting lower-than-expected revenue.
That triggered a drop in shares of the other members of the so-called FAANG group, Facebook, Apple, and Netflix. Those stocks triggered a broader drop in global markets last Friday.
