Amazon Misses Expectations, But Cloud Business Soars

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Amazon's $113 billion in revenue fell short of expectations, unnerving investors.

The e-tailer’s $113.08 billion in revenue over the second quarter missed expectations of $115.06 billion, and with its third-quarter outlook projecting sales of $106 billion to $112 billion — not the $118.90 billion expected — shares dropped as much as 5 percent in after-hours trading.

But in the period between April and June, as more vaccinations went out and more regions fully reopened, brick-and-mortar retailers anticipated a COVID-19 weary public flooding back to stores.Those broad outlines are shaded with plenty of uncertainty, however. Surging infections due to the Delta variant are poised to throw regional and statewide reopenings into disarray, not to mention back-to-school plans, which can reshape shopping behaviors once more.

If consumers who might normally shop at Amazon can’t get the goods they need, they will continue to hit up alternative sources, like Target and Walmart. People may also redirect their personal budgets away from buying things to activities, he noted. “A greater amount of discretionary income is going to things consumers were unable to do during the pandemic, such as travel,” Forte added.

Not that there weren’t bright spots in the report. One appears to be Amazon Web Services, from where new chief executive officer Andy Jassy hails. So while Wall Street might be holding its breath, others are choosing to look on the bright side, focusing on AWS and other parts of the business.

 

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