Amazon posted net sales of 113.1 billion for the second quarter, up 27%, but fell short of Wall Street expectations, sending its stock down 5% in after-hours trading.
The result was within the range of the company’s previously issued guidance of net sales between $110 billion and $116 billion. However, Wall Street analysts had expected Amazon to report overall net sales of $115 billion, on average, a 29% increase year-over-year.
Amazon was still able to top expectations with profits of $7.8 billion or $15.12 per share. Analysts expected earnings per share of $12.22, up from $10.30 per share a year ago.
- Amazon’s online sales growth rate, which has ranged from 37% to 49% amid the pandemic over the past year, rose 13% to $53.1 billion in the latest quarter.
- The company’s cloud unit, Amazon Web Services, boosted its growth rate to 37%, with net sales of $14.8 billion, and operating income of $4.2 billion.
- Amazon’s “other” category, which includes advertising revenue, grew to $7.9 billion for the second quarter, up 87%.
- Total employment reached a new high of 1.335 million worldwide full- and part-time employees as of the end of June, up 64,000 from the end of March.
Amazon’s guidance for the third quarter also appears to be factoring into the after-hours stock slide. The company says it expects net sales between $106 billion and $112 billion, up between 10% and 16%, with operating profits between $2.5 billion and $6 billion, down from $6.2 billion in the third quarter.
Brian Olsavsky, the company’s chief financial officer, addressed the slowdown in online sales on a conference call with reporters.
About mid-May of last year, the growth rate for the business jumped into the 35 to 45% range from what had been about 20 to 21% growth rate pre-pandemic. So we’re starting to lap that year-over-year. And that’s why you see some of the growth rates coming down. Once we lap May 15, we see the business growing in the mid-teens percent. It’s essentially a combination of lapping last year’s COVID strength, and also the additional mobility that we’re seeing among our customers especially in the United States and Europe, people getting out more, doing other things besides shopping.
The company’s news release marked Andy Jassy’s earnings debut as Amazon CEO, quoting him in the spot previously reserved for his predecessor, Amazon founder Jeff Bezos.
Jassy spoke to the vital services provided by the company’s consumer business and Amazon Web Services during the pandemic, and thanked the company’s employees, saying he is “very excited to work with you as we invent and build for the future.”