• Wed. Dec 1st, 2021

Amazon Stock Sinks as Q3 Profits Are Cut in Half From Last Year

Oct 28, 2021

But hey, Prime Video had Camila Cabello’s ”Cinderella“

Amazon

Amazon stock sunk like a stone Thursday afternoon on news that the company’s profits halved from last year. Sales from this Q3 were up from 2020, however.

While shares of AMZN immediately dropped more than $130 apiece, that *only* represents about 4% to the incredibly pricey stock. Not that our basic math is going to be of much comfort to investors.

Amazon’s third-quarter 2021 net sales were $110.8 billion, a 15% increase from the comparable three-month period last year. Still, the sales figure missed Wall Street’s consensus estimate of $111.6 billion.

“We’ve always said that when confronted with the choice between optimizing for short-term profits versus what’s best for customers over the long term, we will choose the latter—and you can see that during every phase of this pandemic,” Andy Jassy, Amazon’s new CEO, said in a statement. “In the first several months of COVID-19, Amazonians played an essential role to help people secure the requisite PPE, food, and other in-demand items needed, and we worked closely with businesses and governments to leverage AWS to maintain business continuity as they responded to the pandemic. Customers have appreciated this commitment, which is part of what’s driving this past quarter’s AWS growth acceleration to 39% year over year; but, it’s also driven extraordinary investments across our businesses to satisfy customer needs—just one example is that we’ve nearly doubled the size of our fulfillment network since the pandemic began.”

“In the fourth quarter, we expect to incur several billion dollars of additional costs in our Consumer business as we manage through labor supply shortages, increased wage costs, global supply chain issues, and increased freight and shipping costs—all while doing whatever it takes to minimize the impact on customers and selling partners this holiday season,” Jeff Bezos’ successor continued. “It’ll be expensive for us in the short term, but it’s the right prioritization for our customers and partners.”

Last quarter was the final one with Bezos in the CEO role.

Amazon stock (AMZN) closed Thursday afternoon at $3,446.57 per share. The U.S. stock markets will reopen Friday at 9:30 a.m. ET.

Amazon executives will host a conference call at 5:30 p.m. ET to discuss the quarter in greater detail.

More to come…

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