Amazon shares fall 7%, forecasts below expectation
Amazon.com Inc’s forecast revenue and profit for the holiday quarter was below expectations as it faced fierce competition and rising costs from plans to speed up global delivery times.
Shares fell 7% as revenue growth for the company’s lucrative cloud computing business slowed down in the third quarter. Amazon beat expectations on overall third-quarter revenue, posting a sales rise of 24% to $70 billion.
Expenses has also risen due to the company moving inventory closer to customers and beef up its last-mile transportation footprint, Chief Financial Officer Brian Olsavsky said.
Still, Amazon is betting that fast shipping will spark sales growth, a strategy that has helped it become the world’s largest online retailer.