Investors came down hard on Amazon.com Inc on Thursday after the world's No. 1 online retailer reported holiday quarter profit well below Wall Street's estimates, raising concerns that the stock's recent spell of growth is over.
The company's shares plunged 13% after hours on Thursday, following a 9% increase in regular trading. They are still up 80% over the past 12 months.
"The growth story that investors were looking for... clearly Amazon has not been able to live up to the hype, said Adam Sarhan, Chief Executive of Sarhan Capital.
"As far as I am concerned, Amazon is now out of the FANG group," he said, referring to the group of high-growth tech stocks that includes Facebook Inc, Netflix Inc and Alphabet Inc, formerly known as Google.
Amazon reported its highest-ever quarterly profit, and its third consecutive profitable quarter for the first time since 2012. Still, there were concerns over its margins.
"By comparative retail standards, Amazon’s level of profitability is still painfully weak," said Neil Saunders, CEO of retail analyst firm Conlumino, who is still positive on Amazon's prospects. "For every dollar the company takes, it makes just 0.75 of a cent in profit."
Amazon's fourth-quarter net profit rose to US$482 million ($688 million), or US$1.00 per share, in the quarter ended Dec. 31, up from US$214 million, or 45 cents per share, a year earlier.
That figure was held back by rising operating costs and slowing growth in its cloud services business. It was well below analysts' average forecast for profit of US$1.56 per share, according to Thomson Reuters I/B/E/S.
Net sales rose 21.8% to US$35.75 billion, but missed analysts' expectations of US$35.93 billion.
Excluding a US$1.2 billion unfavourable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 26% compared with the fourth quarter of 2014.
Amazon Chief Financial Officer Brian Olsavsky said foreign exchange had an unexpectedly large impact, but overall the company had "a very strong quarter and a strong year."
Net sales from its cloud services business, Amazon Web Services, rose 69.4% to US$2.41 billion, compared with a growth of more than 78% in the third quarter. AWS continues to be the fastest growing division within Amazon.
Amazon's net sales in North America increased 24% to US$21.5 billion.
The company's total operating expenses surged more than 20% to US$34.64 billion in the fourth quarter.
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The company's shares plunged 13% after hours on Thursday, following a 9% increase in regular trading. They are still up 80% over the past 12 months.
"The growth story that investors were looking for... clearly Amazon has not been able to live up to the hype, said Adam Sarhan, Chief Executive of Sarhan Capital.
"As far as I am concerned, Amazon is now out of the FANG group," he said, referring to the group of high-growth tech stocks that includes Facebook Inc, Netflix Inc and Alphabet Inc, formerly known as Google.
Amazon reported its highest-ever quarterly profit, and its third consecutive profitable quarter for the first time since 2012. Still, there were concerns over its margins.
"By comparative retail standards, Amazon’s level of profitability is still painfully weak," said Neil Saunders, CEO of retail analyst firm Conlumino, who is still positive on Amazon's prospects. "For every dollar the company takes, it makes just 0.75 of a cent in profit."
Amazon's fourth-quarter net profit rose to US$482 million ($688 million), or US$1.00 per share, in the quarter ended Dec. 31, up from US$214 million, or 45 cents per share, a year earlier.
That figure was held back by rising operating costs and slowing growth in its cloud services business. It was well below analysts' average forecast for profit of US$1.56 per share, according to Thomson Reuters I/B/E/S.
Net sales rose 21.8% to US$35.75 billion, but missed analysts' expectations of US$35.93 billion.
Excluding a US$1.2 billion unfavourable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 26% compared with the fourth quarter of 2014.
Amazon Chief Financial Officer Brian Olsavsky said foreign exchange had an unexpectedly large impact, but overall the company had "a very strong quarter and a strong year."
Net sales from its cloud services business, Amazon Web Services, rose 69.4% to US$2.41 billion, compared with a growth of more than 78% in the third quarter. AWS continues to be the fastest growing division within Amazon.
Amazon's net sales in North America increased 24% to US$21.5 billion.
The company's total operating expenses surged more than 20% to US$34.64 billion in the fourth quarter.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
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