Amazon sees $ 148 billion in market value wiped out after sales outlook misses forecast – .

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Amazon sees $ 148 billion in market value wiped out after sales outlook misses forecast – .


Amazon missed second quarter sales estimates.

  • Amazon fell 8.1% early in the session, wiping out $ 148 billion from the company’s market value.
  • Investors were disappointed after revenue missed estimates and Amazon forecast lower than expected sales.
  • Still, Amazon’s profits still jumped 50% year-over-year and its cloud computing division outperformed.
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Amazon lost $ 148 billion in market value early Friday after the ecommerce giant forecast lower than expected third-quarter sales and missed revenue estimates for the first time since 2018.

The company’s shares fell 8.1% on the Nasdaq exchange on Friday. That took Amazon’s market cap – the value of all of its shares combined – to $ 1.67 trillion, down $ 148 billion from Thursday’s close.

Amazon then slashed its losses to 7.02% lower at $ 3,351.86 at 10:13 a.m. ET. The drop helped push the Nasdaq 100 index down 0.5%.

The online retailer released its second-quarter results after the bell on Thursday, showing sales jumped 27% year-over-year to $ 113 billion. But investors were disappointed, as analysts had predicted sales to increase to around $ 115 billion.

The market was also disappointed with Amazon’s sales forecast for the third quarter, which fell short of expectations. Amazon said operating profit would be between $ 2.5 billion and $ 6 billion, up from $ 6.2 billion in the third quarter of 2020.

Weaker-than-expected Amazon sales and forecasts were largely due to people choosing to shop less online as the coronavirus pandemic eased, the chief financial officer told analysts Brian Olsavsky. The retailer has been a major beneficiary of the COVID-19 outbreak, as people log in to purchase essentials and gadgets while locked away at home.

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The second quarter results were still astounding by most standards, but Amazon’s stock price has become a victim of the company’s success, said Nicholas Hyett, equity analyst at broker Hargreaves Lansdown.

“It says something when you can report quarterly sales roughly equal to Ukraine’s annual GDP and 33% growth in operating profit and still disappoint the market,” he said.

Amazon’s operating profit rose 33% year-over-year to $ 7.7 billion in the second quarter. Its net profit jumped 50% to $ 7.8 billion, beating expectations, as did the revenue of the cloud division of Amazon Web Services.

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