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Amazon Misses Estimates and Offers Downbeat Guidance

Online services and retail giant warns of ‘several billion dollars of additional costs’ in fourth quarter.

Amazon.com  (AMZN) - Get Amazon.com, Inc. Report missed quarterly estimates and offered downbeat guidance for the fourth quarter, citing billions of dollars in additional expenses it expects to incur for labor and shipping costs.

The company said GAAP earnings per share of $6.12 in the quarter. Analysts surveyed by FactSet had been looking for $8.90. Revenue came in at $110.8 billion vs. estimates of $111.6 billion.

“In the fourth quarter, we expect to incur several billion dollars of additional costs in our Consumer business as we manage through labor supply shortages, increased wage costs, global supply chain issues, and increased freight and shipping costs,” said Andy Jassy, Amazon CEO, in a statement. “It’ll be expensive for us in the short term, but it’s the right prioritization for our customers and partners," he added.

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The company forecast net sales of between $130 billion and $140 billion, up between 4% and 12% compared with fourth quarter 2020. The guidance includes an unfavorable impact from foreign exchange rates of approximately 60 basis points. The current analyst consensus calls for revenue of $142.17 billion in the quarter. 

The company said its operating income in the period is expected to be between $0 and $3 billion, compared with $6.9 billion in fourth quarter 2020.

Shares of Amazon fell $118.36, or 3.4%, to $3,328.21 in after-hours trading Thursday. In the regular session, shares rose 1.6% ahead of the report.