Amazon reports plunging sales, profit as COVID curbs begin to ease

Tech and online retail giant Amazon said that the company experienced a drop in profits and sales in the third quarter of 2021 and COVID-19 restrictions begin to ease around the world, directly impacting online splurging.

Amazon reported a profit of $6.2 billion, or $6.12 per share for the three-month period ended September 30, 2021 when compared with $6.3 billion, or $12.37 per share, during the year-ago period. Revenue jumped 15% to $110.8 billion, according to reports from Associated Press.

Analysts surveyed by FactSet on average expected $111.55 billion in quarterly revenue and per-share earnings of $8.90.

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Earlier this year in July, which is the same time frame when founder Jeff Bezos stepped down as the CEO of the company, Amazon warned that the revenue is likely to range between $106 billion to $112 for the third quarter of this year. 

Even though a speed bump may have been in the path of Amazon, the new financial report marks the fourth consecutive quarter when the company has crossed the $100 billion mark in revenue.

Being one of the few businesses that seemed to be perfectly modeled for the COVID-19 pandemic, Amazon was one of the very few businesses that crossed all expectations during the era of isolation.

Also Read: Microsoft reports quarterly profit of $17.2 billion, up by 24% from previous year

The vacuum created by the closure of physical stores selling both essential and non-essential goods was filled by the retail giant as people stuck at home turned to Amazon for everything from groceries to cleaning supplies.

But Amazon is seeing a slowdown in sales growth as a result of the company lapping against last year’s huge pandemic-induced shopping binges. The slowdown also reflects that people, particularly in Europe and the United States, are more mobile and are doing other things besides shopping online, according to reports from Associated Press.

Amazon’s other businesses expanded, too. Sales at its cloud-computing business, which helps power the online operations of Netflix, McDonald’s and other companies, grew 39% in the quarter. And at its unit that includes its advertising business, where brands pay to get their products to show up first when shoppers search on the site, sales rose 49%.

(With AP inputs)