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Amazon stock tanked after the company warned it expects sales growth to slow as the pandemic wanes, even as it got slapped with a record fine from the European Union.
The Seattle-based e-commerce giant’s stock dropped more than 7 percent to 3,347.99 in midday trades on Friday after the Seattle-based behemoth logged a weaker-than-expected performance during the second quarter, reporting $113 billion in revenue compared to analysts’ expectations of $115 billion.
The company likewise signaled that the loosening of coronavirus restrictions could mean lower sales growth. While revenue surged 44 percent in the first quarter of this year, that figure dropped to 27 percent for the period ended June 30. Sales may only rise as much as 16 percent in the third quarter, Amazon said.
Separately on Friday, the European Union hit Amazon with a record $886 million fine over violating the bloc’s privacy laws when processing personal data, a decision that Amazon responded was “without merit.”
Earlier in July, Amazon founder Jeff Bezos stepped down as CEO before blasting into space and eating Skittles. Thursday’s earnings call was the first overseen by the company’s new CEO, Andy Jassy — and the company’s worse-than-expected performance shows that the new head honcho has his challenges cut out for him.
Analysts at Barclays called Amazon’s quarter a “rare miss” that shows the difficulty of predicting post-pandemic business. Benchmark Investment, meanwhile, reportedly called the company’s post-COVID outlook “materially more muted than expected.”
Wedbush Securities managing director Dan Ives told The Post that the company missing expectations was more a result of investor overexcitement than issues with Amazon’s business.
“This was the Street miscalculating e-commerce growth in the eyes of a reopening trajectory — and overall these were strong numbers and consistent with a gold medal tech earnings season from Big Tech,” he said. “The strong have gotten stronger.”
Guru Hariharan, a former Amazon manager who now heads e-commerce firm CommerceIQ, said the results showed that Amazon’s “Prime Day may be losing its luster” but added that he still expects strong growth later this year.
Despite Amazon stock tanking Friday, the company’s shares are still up 4.8 percent since the beginning of this year.
With Post wires
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