Olsavsky said Amazon has baked the wage increases into its fourth quarter guidance, which came in under investor expectations, but he would not quantify its impact on the company's financials. Amazon already offers free shipping on millions of products if a customer buys at least $25 of goods, but only offers two-day shipping at no additional cost to its Prime members.
Heading into the print, Stifel analyst Scott Devitt has raised his near- and long-term revenue estimates for Amazon's retail, advertising, and AWS businesses and modestly increased his margin forecasts.
Amazon's net income in Q3 came to $2.9 billion, or $5.75 per diluted share, on revenue of $56.57 billion. The company has dominated e-commerce in the USA, but faces stepped-up competition from rivals such as Walmart Inc. About half of our Diwali sales previous year were in Q3.
Looking forward to its fourth quarter, Amazon is expecting its net sales to fall between $66.5 billion and $72.5 billion, which would be a growth of between 10-percent and 20-percent over Q4 2017. Amazon has relied on the growth of its Prime members, estimated at about 97 million in the USA, who pay fees in exchange for shipping discounts, video streaming and other services.
The Nasdaq dropped almost 2 percent, sharply cutting its gains for the year and moving deeper into correction territory, while the blue-chip Dow shed 1.1 percent and the benchmark S&P fell 1.56 percent, putting under threat their slim gains for the year. In the same period past year, the company earned 52 cents a share. The shares have dropped about 15 per cent from their September high amid a broader market downturn and closed at US$1,782.17 before the results were released.
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Investors' focus will be on the company's performance in its Web Services business, which is expected to be a major boost to the company's profitability. A big reason behind that was the absorption of Whole Foods Market and the 87,000 people who work there.
"We're not slowing down - Amazon Business is adding customers rapidly, including large educational institutions, local governments, and more than half of the Fortune 100", Bezos said in a statement.
Amazon Chief Executive Officer Jeff Bezos spends heavily to keep ahead, building new warehouses and data centers around the world, inventing new devices and trying to re-imagine the convenience store experience.
Alphabet reported net profit of $9.2 billion, or $13.06 per share, compared with $6.7 billion, or $9.57 per share in the year-ago quarter. Analysts had forecast $US3.11 per share.