[Asia Economy Reporter Yujin Cho] Amazon, the world's largest e-commerce company, surpassed $100 billion in sales for three consecutive quarters, but its stock price plunged on concerns that growth will slow starting in the third quarter.
On the 29th (local time), Amazon announced its Q2 earnings for this year, reporting revenue of $113.08 billion, a 27.22% increase compared to the same period last year.
This figure fell short of Bloomberg's market forecast of $115.06 billion, and compared to last year's revenue growth rate of 40%, the growth pace has slowed.
Net income for the same period rose 48.35% to $7.778 billion. Earnings per share amounted to $15.12, exceeding the market forecast of $12.22.
The revenue falling short of market expectations is interpreted as being influenced by a slowdown in e-commerce sales growth due to the expansion of COVID-19 vaccinations and economic reopening.
However, revenue from Amazon Web Services (AWS), the highly profitable cloud service business segment, increased by 37% to $14.89 billion, maintaining a solid profit growth trend.
Amazon analyzed that cloud demand surged during the COVID-19 pandemic period due to the rapid rise in digital transformation needs.
Amazon announced plans to expand related businesses by building data centers in the United Arab Emirates (UAE) and Israel in the first half of next year. Currently, Amazon operates 81 data centers in 25 regions and plans to build 21 additional new data centers.
However, Amazon expects revenue growth to slow from the second half of this year. For Q3, Amazon provided a revenue guidance of $106 billion to $112 billion, representing a 10-16% increase compared to the same period last year, but below the market expectation of $119.2 billion.
Brian Olsavsky, Amazon's Chief Financial Officer (CFO), stated, "Compared to last year when lockdowns due to COVID-19 were in place, the growth momentum has somewhat slowed," and added, "We expect the growth slowdown to continue for several quarters starting from Q3 this year." Following this outlook, Amazon's stock price fell 6.8% in after-hours trading after the earnings announcement.
Earlier, Facebook and Apple, which announced their Q2 earnings, also forecasted that the growth momentum, which peaked due to COVID-19, would slow starting in Q3.
Meanwhile, Amazon founder Jeff Bezos completed his final term as CEO in Q2 this year. On the 5th, Bezos handed over the CEO position to Andy Jassy and currently serves as the chairman of the board.
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