Bad Santa! Amazon shares tumble after disappointing Christmas forecast

Amazon sinks as revenue growth disappoints

As part of its earnings call, the company also warned that its fourth quarter would likely do the same, despite including the busy holiday season.

The new driver of the stock, of course, is the very mixed third-quarter results on Thursday. Revenue came in below analysts projections.

Indeed, shareholders seemed to focus on the negative.

Q3 revenue: $56.6 billion. But that still fell shy of the $57.1 billion analysts had predicted.

Revenue from Amazon's worldwide business, which brings in 27.5 percent of total sales, was at the heart of the shortfall in results, growth halving to 13.4 percent compared to the previous quarter. Shares declined as much as 6.5 per cent in extended trading. The Street wanted to hear $73.79 billion, but Amazon forecast between $66.5 billion and $72.5 billion.

The nerve-wracking anxiety that's gripped the US stock market seems oddly unmoored from economic reality: Despite the turbulence on Wall Street, economic growth is strong, unemployment ultra-low and consumers exceptionally confident.

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"With consumer sentiment and employment rates near 18-year highs and ongoing store closures in the USA, we believe Amazon's strong retail sales growth will continue through the balance of the year and beyond", the analyst added. Analysts had previously forecast it would earn $5.79 a share in the quarter. Capital expenditures soared to $5.3 billion from $3.5 billion previous year, with 20 data centre sites in development, Porat said. Google's other revenue, which includes its cloud business, grew 29 percent on year, 4 percent below estimates of Cowen & Co. analysts.

Amazon Web Services is now contributing more operating income than Amazon.com North America, with $2.077 billion operating income reported for the quarter, versus $2.032 billion for Amazon.com NA. The company says it had operating income of $3.7 billion during its latest third quarter; in comparison, its third quarter in 2017 had an operating income of $347 million. The company continues to increase wallet share with existing cloud customers, and acquisition remains strong evidenced by Amazon's healthy pipeline of new enterprise clients.

The tech company's third-quarter results fanned investor concern that big investments in new businesses, increasing regulatory scrutiny and emerging competition are producing slow and unpredictable returns.

Amazon also introduced the all-new Fire HD 8 tablet, featuring an 8-inch HD display, a quad-core processor, 16 GB of internal storage with support for up to 400 GB more via microSD, up to 10 hours of mixed use battery life, and hands-free access to Alexa.

Overall revenue rose 21 percent to $33.74 billion, missing analysts' estimate by about $310 million, according to Refinitiv data.

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