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Amazon’s Q2 2024 Earnings Report: Revenue Misses Expectations, Shares Drop

8/01/2024

Amazon’s Q2 2024 Earnings Report: Revenue Misses Expectations, Shares Drop

Amazon’s second-quarter earnings report for 2024 revealed weaker-than-expected revenue, causing shares to slide by up to 5% in extended trading. Despite surpassing earnings expectations with $1.26 per share compared to the anticipated $1.03, the company’s revenue fell short at $147.98 billion against the expected $148.56 billion.

Key Financial Highlights

  • Earnings: $1.26 per share vs. $1.03 expected by LSEG
  • Revenue: $147.98 billion vs. $148.56 billion expected by LSEG

Segment Performance

  • Amazon Web Services (AWS): $26.3 billion vs. $26 billion expected
  • Advertising: $12.8 billion vs. $13 billion expected

Future Outlook

Amazon’s forecast for the current quarter projects revenue between $154 billion and $158.5 billion, reflecting an 8% to 11% growth compared to the same period last year. However, the midpoint of this range, $156.25 billion, is below the average analyst estimate of $158.24 billion. The company also anticipates third-quarter operating income to range from $11.5 billion to $15 billion, compared to $11.2 billion in the previous year.

Challenges and Growth Areas

Amazon faces challenges in its core retail business due to increasing competition from discount platforms like Temu and Shein. Online store sales grew by only 5% year-over-year, while revenue from third-party seller services, including commissions and shipping fees, increased by 12%.

In the cloud sector, AWS reported a 19% growth from the previous year, outperforming estimates but lagging behind competitors like Microsoft and Google, which reported 29% growth in their cloud divisions.

Conclusion

Amazon’s Q2 2024 earnings report highlights both achievements and challenges. While the company exceeded earnings expectations, it fell short on revenue and issued a cautious forecast for the upcoming quarter. Investors and analysts will be closely watching how Amazon navigates its competitive landscape and leverages growth opportunities in its various business segments.

Stay tuned for further updates as this story develops.