Amazon Stock Drops on Weaker Holiday Guidance

Leonard Ortiz/Digital First Media/Orange County Register via Getty Images
Jeff Bezos, founder and CEO of Amazon, speaks at the Long Beach Airport in Long Beach on Nov. 12, 2018. 

The e-commerce giant has been investing in one-day delivery.

Amazon's stock was trading down more than 8% after hours after the e-commerce giant's profits dropped during its third quarter. 

The company brought in revenue of $70 billion during the period, up 24% year-over-year, but saw its profits decrease to $2.1 billion, or $4.23 per share. Amazon has been investing heavily in one-day delivery, which could have dragged profits during the quarter. 

Amazon also disclosed that it expects a soft holiday quarter, forecasting sales between $80 billion and $86.5 billion during the period -- less than the $87 billion that some analysts were expecting. 

Amazon CEO Jeff Bezos released a statement touting the investment in one-day delivery. "Customers love the transition of Prime from two days to one day -- they’ve already ordered billions of items with free one-day delivery this year," he said. "It's a big investment, and it's the right long-term decision for customers. And although it’s counterintuitive, the fastest delivery speeds generate the least carbon emissions because these products ship from fulfillment centers very close to the customer -- it simply becomes impractical to use air or long ground routes. Huge thanks to all the teams helping deliver for customers this holiday."

During the period, Amazon released an expanded lineup of Fire TV products and debuted a number of new shows, including The Boys and Carnival Row. Amazon Studios programming also had a strong night at the Emmys, with Fleabag taking home four awards and The Marvelous Mrs. Maisel winning two. 

Amazon also introduced new developments to its Amazon Music service, including the launches of its Amazon Music HD premium quality listening tier, Amazon Music Unlimited for Brazil and an exclusive Amazon Music Unlimited offer at $0.99 a month for student Prime members in the U.S. 

And in September, Amazon introduced a fresh lineup of six Echo smart speaker devices, as well as the new Echo Frames, glasses connected to Alexa, and Echo Loop, an Alexa-enabled "smart ring." 

Amazon shares closed the day up 1% to $1,780.78. Shares were trading down more than $130 on the earnings news. 

A version of this article was originally published by The Hollywood Reporter.


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