Amazon earnings report: Profits jump, but shares slump

E-commerce giant Amazon reported big jumps in sales and profits for the third quarter in its earnings release after the close of trading on Thursday. Net income climbed to $2.88 billion, or $5.75 per diluted share, compared with $256 million, or 52 cents per diluted share, in third quarter 2017.  

It said net sales increased 29 percent to $56.6 billion, compared with $43.7 billion in the year-earlier period. Minus a $260 million unfavorable impact from foreign exchange rate changes, net sales increased 30 percent compared with third quarter 2017.  

The per-share results surpassed Wall Street expectations. The average estimate of 16 analysts surveyed by Zacks Investment Research was for earnings of $3.29 per share.

However, the online retailer’s revenue missed Street forecasts. Sixteen analysts surveyed by Zacks expected $57.05 billion.

For the current quarter ending in December, Amazon said it expects revenue in the range of $66.5 billion to $72.5 billion. Analysts surveyed by Zacks had expected revenue of $73.87 billion.

Amazon shares have risen 53 percent since the beginning of the year, while the Standard & Poor’s 500 index has increased slightly more than 1 percent. In the final minutes of trading on Thursday, shares hit $1,784.19, a rise of 83 percent in the last 12 months.

Immediately after the earnings announcement, shares traded about 5 percent lower, giving up $89 to $1,694.