Amazon shares fell more than 7% in Thursday’s extended trading after the company reported its first revenue loss in three years and gave poor guidance for the third quarter.
Amazon’s revenue grew 27% year over year to $113.08 billion. This means a significant slowdown from the second quarter of 2020, when sales soared 41%.
In a report, Amazon CFO Brian Olsavsky criticized the harsh year-to-year comparisons of its businesses during the Covid-19 lockdowns. In mid-May of last year, Amazon saw growth rates jump to between 35% and 45%, he said.
“We’re starting to get over that and that’s why we see part of the growth rate falling,” said Olsavsky, adding that Amazon expects to see slower growth in the coming quarters.
For the third quarter, Amazon said it expects to account for sales between $106 billion and $112 billion, which represents a 10% to 16% growth compared to the same period last year.
“Our customers are safe and healthy and continue to place orders with the company. We know there will be more vacations or more mobility. These are things that people probably avoided last year,” said Olsavsky.
Amazon said its third-quarter operating profit will be in the range of $2.5 billion and $6 billion, a remarkably large difference. This means a reduction from the US$6.2 billion in the third quarter of 2020.
Amazon Web Services grew its revenue by 37% in the second quarter, faster than the 32% growth in the previous quarter. AWS revenue reached $14.81 billion for the quarter, surpassing analysts’ estimate of $14.20 billion.
The number of Amazon employees continues to increase. At the end of the third quarter, Amazon employed 1.33 million people worldwide, an increase of 52 percent year-over-year.
An increase in covid19 cases in the delta variant has prompted some Silicon Valley companies, including Facebook, Google, Uber and Twitter, to rethink their back-to-office plans and demand vaccinations for employees or close offices again.