Amazon CEO Jeff Bezos’ reign as the world’s richest person was short lived. The company’s Q2 report showed earnings way below analyst expectations, sending the share price down about 2% in post market trading.
Earlier in the day Amazon touched an all time high, enabling Bezos to briefly pass Bill Gates as world’s richest person (at least on paper) according to Forbes’ real time list of The World’s Billionaires. At the end of the day Gates had an estimated net worth of $89.8 billion vs. Bezos with $88.8 billion.
Amazon’s earnings suffered as costs rose 28.2%, exceeding the 24.8% increase in sales. Without a $502 million drag from the weakness of foreign currencies vs the U.S. dollar, sales would have been up 26%, the company says.
The e-retailer ended the quarter with net income of $197 million, down 77% vs the period last year, on revenues of $37.96 billion. That was ahead of the $37.18 billion that analysts expected.
But the company’s 40 cents in per share earnings compared to expectations for $1.42.
“Our teams remain heads-down and focused on customers,” Bezos says. “In the last few months, we launched Echo Show (our newest Echo device with a video screen), introduced calling and messaging via Alexa on all Echo devices, debuted Inside Edge on Prime Video (the first of 18 Indian Original Series), introduced Amazon Channels in both the U.K. and Germany, launched four new Fire tablets, expanded Amazon Fresh to Germany, launched Prime Now in Singapore, launched our 25th airplane with Prime Air, hired more than 30,000 new employees, opened three new Amazon Books stores, launched more than 400 significant AWS features and services, migrated more than 7,000 databases using AWS Database Migration Service, and held our third annual Prime Day — signing up more Prime members than ever before. It’s energizing to invent on behalf of customers, and we continue to see many high-quality opportunities to invest.”
Amazon told investors to expect Q3 revenues of between $39.25 billion and $41.75 billion. Operations could generate a $400 million loss to a $300 million profit.
The guidance assumes that “no additional business acquisitions, investments, restructurings, or legal settlements are concluded,” the company says.