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Saturday, 16 January 2021

Amazon's gloomy holiday outlook drives down shares

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Amazon's gloomy holiday outlook drives down shares
Amazon's gloomy holiday outlook drives down shares

Amazon on Thursday forecast revenue and profit for the holiday quarter below expectations, as it faces fierce competition and rising costs from its plan to speed up delivery times globally.

Lisa Bernhard reports.

Amazon delivered a lump of coal to investors Thursday – two months ahead of Christmas.

The world’s biggest online retailer forecast revenue for the crucial holiday quarter below Wall Street’s estimates, sending the company’s shares down in after-hours trading.

Holiday sales typically generate a majority of retailers’ sales and profit.

Amazon faces increasing competition from Walmart and others racing to expand their online businesses - and as a result continues to invest heavily in its one-day shipping option.

CEO Jeff Bezos attempted to put a positive spin on things Thursday by boasting how this holiday season – Amazon’s 25th – will be its best for Prime Customers, whose delivery time on millions of items will be shaved from two days to one.

But the cost of doing so cut in to the current quarter’s operating income, which fell from a year ago.

The ongoing U.S.-China trade spat also hangs in backdrop, hurting many retailers.

Amazon Web Services – long the crown jewel of the company for providing cloud and networking tools for major companies – continued its growth trajectory… but it, too, did not expand as much as Wall Street expected.

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