Amazon Shares Fall After Earnings Miss Despite Strong AWS Growth
Amazon's quarterly revenue and earnings fell short of Wall Street forecasts despite rapid growth at AWS, sending shares lower in after-hours trading Thursday.
Amazon shares fell in after-hours trading Thursday after the company reported third-quarter revenue and earnings below Wall Street expectations, even as its cloud business posted its fastest growth in nearly five years.
The company reported $201.9 billion in net sales for the quarter ended September 30, up 12% from a year earlier. Earnings were $1.89 per diluted share. Analysts surveyed by LSEG had expected $202.31 billion in revenue and earnings of $1.96 per share.
Amazon Web Services remained a bright spot. AWS sales rose 39% to $46 billion, while the division's operating income climbed to $17.8 billion from $11.4 billion a year earlier.
Across Amazon, operating income increased to $28.1 billion from $17.4 billion. Its operating margin reached 13.9%, which the company described as its highest ever. Net income declined to $20.7 billion from $21.2 billion; Amazon said the prior-year figure included substantial gains from its Anthropic investment.
The results also showed the scale of Amazon's infrastructure spending. Free cash flow over the trailing 12 months fell to an outflow of $42.4 billion, with Amazon attributing the change primarily to increased property and equipment purchases tied to artificial intelligence. The company maintained its full-year capital spending forecast of $220 billion.
The after-hours decline reflected investors' response to the earnings release after the regular stock-market session had ended. It was not the stock's closing move for the day.