- Amazon (NDAQ:AMZN) stock dropped sharply early Friday after its second quarter financial results failed to meet expectations of investors.
- Net sales increased 10 per cent to US$148 billion in the second quarter that ended June 30.
- Amazon expects net sales to be between US$154.0 billion and US$158.5 billion in Q3 2024.
- Shares of Amazon.com were down 12.16 per cent, trading at US$161.68.
Amazon (NDAQ:AMZN) stock dropped sharply early Friday after its second quarter financial results failed to meet expectations of investors.
Shares of Amazon dropped more than 12 per cent early Friday in reaction to the Q2 2024 results released after the close of trading Thursday.
Net sales increased 10 per cent to US$148 billion in the second quarter that ended June 30 (compared with US$134.4 billion in second quarter 2023). Falling slightly short of analysts’ expectations of US$148.8 billion was enough to push Amazon stock downward amidst the recent decline in Big Tech companies.
Last quarter, Amazon had expected net revenue in Q2 2024 to range between US$140 billion and US$149 billion.
Other highlights from Amazon’s Q2 2024 report:
- Operating income increased to US$14.7 billion in the second quarter, compared with US$7.7 billion in second quarter 2023.
- Net income increased to US$13.5 billion in the second quarter, or US$1.26 per diluted share, compared with US$6.7 billion, or US$0.65 per diluted share, in second quarter 2023.
- Operating cash flow increased 75 per cent to US$108.0 billion for the trailing 12 months, compared with US$61.8 billion for the trailing 12 months ended June 30, 2023.
- Free cash flow increased to US$53.0 billion for the trailing 12 months, compared with US$7.9 billion for the trailing 12 months ended June 30, 2023.
- Free cash flow less principal repayments of finance leases and financing obligations increased to US$49.6 billion for the trailing 12 months, compared with US$1.9 billion for the trailing 12 months ended June 30, 2023.
- Free cash flow less equipment finance leases and principal repayments of all other finance leases and financing obligations increased to US$51.4 billion for the trailing 12 months, compared with US$6.7 billion for the trailing 12 months ended June 30, 2023.
“We’re continuing to make progress on a number of dimensions, but perhaps none more so than the continued reacceleration in AWS growth,” Andy Jassy, Amazon president and CEO said in a statement. “As companies continue to modernize their infrastructure and move to the cloud, while also leveraging new generative AI opportunities, AWS continues to be customers’ top choice as we have much broader functionality, superior security and operational performance, a larger partner ecosystem, and AI capabilities like SageMaker for model builders, Bedrock for those leveraging frontier models, Trainium for those where the cost of compute for training and inference matters, and Q for those wanting the most capable GenAI assistant for not just coding, but also software development and business integration.”
In its third quarter 2024 guidance, Amazon expects net sales to be between US$154.0 billion and US$158.5 billion, growing between 8 and 11 per cent compared with Q3 2023. It expects operating income to be between US$11.5 billion and US$15.0 billion, compared with $11.2 billion in Q3 2023.
In the broader context of the tech industry, Amazon, along with competitors Microsoft and Alphabet, is leveraging its dominance in the cloud computing sector to gain a competitive edge in the burgeoning artificial intelligence market. As AI tools increasingly rely on vast amounts of data and processing power, cloud providers play a crucial role in supplying the necessary infrastructure to support AI development and deployment.
For more on the company, visit how to buy Amazon stock.
Shares of Amazon.com, Inc. (NDAQ:AMZN) were down 12.16 per cent, trading at US$161.68 at 10:15 am ET Friday.
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(Top photo of Amazon sign on an office building: Adobe Stock)