Amazon stock has taken a beating of late. But, Jeff Bezos is still the richest man in the world.
Amazon just declared its third quarter (Q3) results, and it is a mixed bag.
Even as it posted record profits for the quarter, the Seattle-based tech giant missed revenue expectations, leading its stock to tumble more than nine percent in a day. As a result, Amazon’s market cap took a hit, and now stands at $869 billion from a peak of $1 trillion in September.
According to Market Watch, “That valuation appears to be headed for a healthy trim on Friday. If that decline holds, Amazon would be overtaken by Microsoft, which ended Thursday’s session with a market cap of $831.5 billion.”
Amazon’s Q3 revenues stood at $56.6 billion, and profits were at $2.9 billion for the quarter ended September 30. This is its largest quarterly profit till date and fourth successive quarter in which earnings were north of $1 billion.
In an earnings call, Amazon CFO Brian Olsavsky credited the cloud services division (Amazon Web Services) and the company’s nascent advertising business for surging profits. AWS sales jumped 46 percent to $6.7 billion, while ad sales doubled to $2.5 billion, indicating Amazon’s ascendancy in online advertising - a space currently defined by the Google-Facebook duopoly.
Amazon Business, the firm’s B2B division, too grew handsomely. Founder Jeff Bezos revealed that the segment was now recording annual sales of $10 billion, and is catering to public and private sector companies in about eight countries.
Bezos said in the call,
“Amazon Business is adding customers rapidly, including large educational institutions, local governments, and more than half of the Fortune 100. These organisations are choosing Amazon Business because it increases transparency into business spending and streamlines purchasing, with increased control.”
However, conservative Q4 projections that fell short of analyst estimates caused Amazon stock to trade low on Thursday. Amazon said it expects holiday quarter (Q4) sales to be in the range of $66.5 billion to $72.5 billion, while analysts had projected revenues of $73.8 billion.
Amazon also announced that it would be increasing daily minimum wage to $15 for nearly 400,000 workers in the US and the UK.
Even though Amazon stock is down since its peak in July-August, Bezos continues to be the richest man in the world with an estimated wealth of $140 billion. He owns more than 17 percent in the company.