ABad news continues to come from the technology industry. The online retailer Amazon.com gave a much worse outlook for the final quarter than expected when it presented its business results on Thursday after the market closed. In addition, revenue growth has slowed at Amazon Web Services (AWS), the cloud computing division that has become a flagship business for the company in recent years. Amazon’s stock price fell nearly 20 percent in after-hours trading.
For the third quarter, Amazon reported revenue growth of 15 percent to $127.1 billion, slightly below analysts’ expectations. Good news this time was that the core business of online trading has returned to growth. Sales increased here by 7 percent, in the previous quarter there had been a minus. Amazon’s advertising business is also holding up amidst the difficult economic environment and managed a 25 percent increase in sales.
AWS revenue rose 27 percent, which was the best performance of any major Amazon division. But in the second quarter there was still growth of 33 percent. AWS has become increasingly important for the group in recent years, and the business is also very profitable compared to other activities. In the third quarter, its operating income was $5.4 billion, well above the group’s operating income of $2.5 billion. So without AWS, Amazon would have reported a loss in the billions. Amazon’s net income fell 9 percent in the past three months to $2.9 billion.
For the fourth quarter, Amazon predicts sales of between $140 billion and $148 billion, analysts had hoped for $155 billion.
