Amazon.com, Inc. Shares Slip After Huge Earnings Miss

Amazon released its latest earnings report after closing bell tonight, posting diluted earnings of 52 cents per share and basic earnings of 53 cents per share or net income of $252 million on $32.7 billion in sales. Analysts were expecting earnings of 78 cents per share on $32.69 billion in revenue. In last year’s third quarter, the internet giant reported 17 cents per share in earnings or net income of $79 million on $25.4 billion in net revenue.

Amazon records growth in all segments

Amazon’s operating income grew to $575 million from $406 million in the same quarter a year ago. North America sales grew to $18.9 billion from $15 billion last year, while International net sales increased to $10.6 billion from $8.3 billion last year. Amazon Web Services revenue increased to $3.2 billion from $2.1 billion in last year’s third quarter.

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Company management talked up the technology and video content the company released during the September quarter, especially the Alexa digital assistant.

“Alexa may be Amazon’s most loved invention yet — literally — with over 250,000 marriage proposals from customers and counting,” Amazon Chief Executive Officer and Founder Jeff Bezos said in a statement. “And she’s just getting better. Because Alexa’s brain is in the cloud, we can easily and continuously add to her capabilities and make her more useful — wait until you see some of the surprises the team is working on now.”

Amazon’s guidance on the weak side

For the fourth quarter, Amazon guided for sales of 42 billion to $45.5 billion, representing a growth rate of 17% to 27% year over year, which is rather light compared to the consensus of $44.58 billion. The outlook includes about 60 basis points of currency tailwinds.

The online retailer expects operating income to be between $0 and $1.25 billion, compared to the year-ago quarter’s $1.1 billion.

Shares of Amazon declined by as much as 4.69% to $780 in after-hours trades following tonight’s earnings report.