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Amazon Stock Tumbles on Revenue Miss and Weak Forward Guidance

Amazon shares tumble after missing analysts’ second-quarter revenue forecasts and offering up weaker sales guidance for the third quarter.

Amazon  (AMZN) - Get, Inc. Report shares tumbled more than 7% on Friday after the online retail giant posted earnings that were better than expected but sales that missed analysts’ forecasts as well as weak guidance for the third quarter.

Amazon posted earnings of $15.12 a share, 46% higher than the $10.30 a share it earned a year ago and ahead of FactSet consensus forecasts of $12.30 a share.

Revenue came in at $113.1 billion, up 27% from a year ago but still below analysts' estimates of $115.2 billion. Operating expenses were up 26.9% at $105.4 million.

On a post-earnings conference call, Amazon CFO Brian Olsavsky blamed tough year-over-year comparisons to its business during COVID-19 lockdowns as consumers flocked to the online retailer during the height of the pandemic and stay-at-home orders.

“We’re starting to lap that and that’s why you see some of the growth rate coming down,” Olsavsky said, adding that Amazon expects to see slower growth continue for the next few quarters.

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For the third quarter, Amazon said it currently expects sales of between $106 billion and $112 billion, representing growth of 10% to 16% compared to the same period last year. Analysts polled by FactSet are currently expecting revenue of $119.3 billion.

Olsavsky also noted that Amazon is in the middle of a multiyear investment cycle, which includes spending heavily to increase warehouse capacity across the country. Most of Amazon’s 2021 spend and building openings are planned for the second half of the year, he said.

TheStreet's Jim Cramer and the Action Alerts Plus team called Amazon's earnings report sub-prime, noting the outlook in particular " a pretty big disappointment."

"We are big believers that the pandemic pulled forward e-commerce adoption, but what a revenue miss and a weaker-than-expected outlook also suggest is that demand was greatly pulled forward, too,' the AAP team said.

At last check, shares of Amazon were 7.46% at $3,331.27.

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