Following a bleak Christmas sales outlook, Amazon shares decline 10%

 For many customers, this is unfamiliar territory, according to chief financial officer Brian Olsavsky.

Amazon released sales predictions well below those of Wall Street, warning that consumer spending was in "uncharted seas," sending its shares down 10% on Friday and adding to the air of doom prevailing in the internet industry.

The e-commerce and cloud computing company, which has emerged as a contemporary economic barometer for the US, predicted that fourth-quarter revenues, which include the crucial Christmas shopping season, would range between $140 billion and $148 billion. According to S&P Capital IQ, that was as much as $15 billion less than the $155 billion experts had predicted.

Analysts had predicted $5 billion in operational profitability for the fourth quarter, but Amazon said it would be between $0 and $4 billion.

Rising inflation and energy costs, according to Amazon's chief financial officer Brian Olsavsky, have caused people and companies to reevaluate their purchasing power. For many customers' budgets, this is unknown territory, he noted.

After Alphabet, the owner of Google, Meta, the parent company of Facebook, and Microsoft alarmed Wall Street with warnings of slower growth and more expenses, it was the third Big Tech company to let investors down this week.

Amazon announced third-quarter revenues of $127.1 billion, up 15% from the prior year but slightly below analysts forecasts. With a $1.1 billion increase in non-operating revenue from its share in electric car manufacturer Rivian, net income decreased to $2.9 billion from $3.2 billion a year earlier.

Although the firm was reducing its storage and logistics expenses, chief executive Andy Jassy cautioned that "there is clearly a lot occurring in the macroeconomic climate."

We'll balance our investments to be more efficient without jeopardizing our important long-term, strategic bets, he continued.

The third quarter saw lower than anticipated sales growth and poorer margins for Amazon's cloud division, which for much of the year had helped to counteract deterioration in retail.

For the first time since the year 2020's conclusion, cloud revenue increased by less than 30%, rising by 28% to $20.54 billion.

Businesses aiming to decrease variable expenses had an adverse effect on the division, according to Olsavsky. In response to this, he remarked, "We started to notice a lot of clients decreasing their costs, which we're pleased to help with." The short-term growth rates are affected.

Amazon's online store's revenue increased by 7% to $53.49 billion after falling in the previous two quarters. However, the business warned that shoppers may limit their spending for the rest of the year.

Consumers have depleted their money, according to Guru Hariharan, CEO of the eCommerce management platform CommerceIQ.

In recent weeks, Amazon has taken steps to cancel failing or experimental ventures, like its Scout delivery robot idea, and has delayed recruiting in several areas.

In terms of corporate employment, Olsavsky claimed that the corporation has become "extremely cautious." "We are geared up for what may be a time of slower development." The development of its healthcare division and the purchase of sports and entertainment content for its Prime Video service has also resulted in increased spending.

Olsavsky estimated that 25 million viewers watched Rings of Power, a Lord of the Rings spin-off, on its first day of availability on Prime Video. Production of the series reportedly cost $1 billion.

Jassy's first full year in leadership would come to an end if the fourth quarter was poor. When Amazon's problems began to worsen in July 2021, he succeeded company founder Jeff Bezos.

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