Amazon tumbles 7% premarket, after missing sales estimates for the first time since 2018 as the pandemic boom cooled

• Amazon’s stock fell 7% in premarket trade after it missed quarterly sales estimates for the first time since 2018.
• The online retailer’s Q2 earnings report gave sales and profit forecasts that underwhelmed investors.
• Nonetheless, Amazon still posted a 50% jump in profit Thursday, and its cloud division beat expectations.
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Amazon‘s stock price fell 6.7% to $3,358 in premarket trading after it missed quarterly sales estimates for the first time since 2018 in its second-quarter earnings, as economies reopened and the pandemic-linked online spending frenzy cooled.

The e-commerce giant’s revenues jumped 27% year-on-year to $113 billion, its earnings report released after the market closed Thursday showed. But investors were left underwhelmed, as analysts had predicted a rise in sales to around $115 billion.

The market was also reacting to Amazon’s prediction that third-quarter revenue would come in slightly lower than analysts had been anticipating. It also said operating profit would be between $2.5 billion and $6 billion, compared with $6.2 billion in the third quarter of 2020.

The US company’s lower-than-expected sales were in large part down to people choosing to shop online less as the coronavirus pandemic eased, the company’s chief financial officer, Brian Olsavsky, told analysts. The retailer was one of the major beneficiaries in the outbreak of COVID-19, as people went online to buy essentials and gadgets while locked down 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’s saying something when you can report quarterly sales roughly equal to the annual GDP of Ukraine and 33% operating profit growth and still disappoint the market. You can see why Jeff Bezos would rather be jetting off into space,” he said.

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