For Wall Street, Amazon’s final quarter with Jeff Bezos as CEO was a disappointment.
The e-commerce behemoth reported $113.1 billion in revenue for the three months ended June 30, up 27% from the same period last year but falling short of analysts’ expectations of $115.2 billion. Despite the fact that Prime Day fell in the June quarter this year, it represents a slowdown from Amazon’s 40 percent sales growth in the second quarter of 2020.
In the coming quarter, Amazon also expects lower sales growth. Net sales are expected to rise between 10% and 16% year over year, according to the company. When compared to the 37 percent sales growth it reported in the third quarter of 2020, this would be a significant slowdown.
Following the earnings report, Amazon (AMZN) shares fell more than 7% in after-hours trading, slashing the company’s market value by more than $100 billion.
Bezos stepped down as CEO and became executive chairman earlier this month. He was replaced as CEO by Andy Jassy, the longtime head of Amazon’s cloud computing division.
Despite the sales shortfall, profits of $7.8 billion exceeded expectations, thanks in part to Jassy’s AWS, which posted a profit of more than $4 billion for the quarter.
However, the mixed results highlight the challenge that Jassy now faces as CEO of Amazon: maintaining the company’s remarkable sales and profit growth that has turned it into one of the most valuable companies in the world. Maintaining Amazon’s growth rate could be particularly difficult after demand for its products and services skyrocketed during the Covid-19 pandemic, as customers and businesses flocked to the company’s services.
Amazon’s guidance outlined a number of potential threats to the company, including the possibility that consumers will cut back on spending if the economy suffers a setback as Covid-19 rises again. It also warned about the dangers of “government actions” in response to the pandemic.
Amazon, along with other big tech companies, is the target of a slew of new antitrust bills proposed by House lawmakers last month, which could make it easier for regulators to disrupt or break up Amazon’s numerous business units.