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Amazon: Here’s what Wall Street says about Amazon’s disappointing guidance



jeff bezos amazon ceo founderJeff Bezos, CEO and founder of AmazonAlex Wong/Getty Images

Amazon on Thursday posted third-quarter earnings that beat on profits but missed on sales. Shares are now under pressure, as investors worry about its softer-than-anticipated revenue forecast for the coming holiday season.

The tech giant earned $5.75 a share, well above the $3.11 expected by Wall Street analysts. But the company’s $56.6 billion sales fell short of the $57.1 billion that was anticipated.

More disappointingly, the retailer said it will generate $3 to $5.54 earnings per share on $66.5 billion to $72.5 billion sales. Analysts were expecting $5.79 profits per share out of $73.8 billion revenues. 

The retailer remains confident in its business.

“We’re not slowing down – Amazon Business is adding customers rapidly, including large educational institutions, local governments, and more than half of the Fortune 100,” said CEO Jeff Bezos in a press release. He added that surging profits from its North American retail and Amazon Web Services (AWS) cloud computing businesses helped boost its bottom line.

Nearly every analyst across Wall Street was impressed by Amazon’s solid margins across all segments and reiterated bullish views on the stock.

Here’s what Wall Street is saying about the quarter:

RBC Capital Markets — ‘Amazon remains an Internet staple’

RBC Capital Markets — 'Amazon remains an Internet staple'

AP/Scott Sady

Price target: $2300 (from $2100)

Rating: Outperform

“Amazon remains an Internet staple,” said Mark Mahaney at RBC.

“Amazon posted generally positive third-quarter results—In-line Revenue with the highest Gross Margin we have seen in any third quarter & record high Operating Margin. $1.3B Operating Profit upside was Amazon’s biggest ever. That said, guidance came in below expectations although, for Operating Margin in particular, given the historical seasonality, we believe there could be upside.”

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