Online giant Amazon are causing high spending. While the corona pandemic was still generating record profits, billions in costs to fix problems in the supply chain are now causing a big drop in profits.
The world’s largest online retailer earned significantly less in the third quarter. In the three months to the end of September, the profit fell compared to the previous year by almost 50 percent to 3.2 billion dollars (2.7 billion euros), as the company announced on Thursday after the US stock market closed in Seattle. The share reacted to the numbers after the trading day with significant price losses.
Revenues rose 15 percent to $ 110.8 billion, but growth was significantly weaker than in the previous quarters. Amazon had already prepared its shareholders for worse results, but the annual report was still disappointing. CEO Andy Jassy warned of higher wages, global problems in the supply chain and increased freight costs before “billions” of additional expenses in the final quarter.
Jassy defended the investment offensive: “It will be expensive for us in the short term, but it sets the right priorities for our customers and partners.” the increased demand in the pandemic, the number of employees increased significantly. According to the quarterly report, Amazon recently employed almost 1.5 million full and part-time employees worldwide – around 30 percent more than a year ago.
In the outlook for the current quarter, Amazon dampened market expectations considerably and only forecast sales between 130 billion and 140 billion dollars. For the traditionally strong Christmas quarter, this is a poor prognosis when measured against Amazon’s standards. Analysts had expected more ambitious goals. According to its own statements, the company’s operating profit is even threatened with a black zero in the worst case. Investors haven’t seen anything like this for a long time.
On the stock exchange, Amazon is currently in a difficult position anyway, with a price increase of almost six percent since the beginning of the year, the group is lagging behind the overall market. A ray of hope was recently Amazon’s lucrative cloud platform AWS, which offers many companies and apps IT services and storage space on the network. The highly profitable division increased quarterly sales by 39 percent to 16.1 billion dollars – the strongest growth since the beginning of 2019. Business with online advertising also flourished, the corresponding division increased its income by 49 percent to 8.1 billion dollars.