‘We’re taking actions to tighten our belt,’ says Amazon CFO

SEATTLE – Net income for e-commerce giant Amazon decreased to $2.9 billion in this year’s third quarter, ended June 30, compared with $3.2 billion in third quarter 2021.

Meanwhile, net sales increased 15% to $127.1 billion in the third quarter compared with $110.8 billion in third quarter 2021.

Earnings per share came in at 28 cents per diluted share this quarter, compared with 31 cents per diluted share in the third quarter of last year.

“We’re encouraged by the steady progress we’re making on lowering costs in our stores fulfillment network and have a set of initiatives that we’re methodically working through that we believe will yield a stronger cost structure for the business moving forward,” said Andy Jassy, Amazon CEO in a statement.

Jassy added that Amazon will continue to balance its investments to be more streamlined without compromising the company’s long-term, strategic bets.

On the earnings call with investors, CFO Brian Olsavsky said the company saw moderating sales growth across many of Amazon’s businesses in the third quarter as well as increased foreign currency headwinds.

“We expect these impacts to persist throughout the fourth quarter,” Olsavsky said on the call. “As we’ve done in similar times in our history, we’re also taking actions to tighten our belt, including pausing hiring in certain businesses and winding down products and services where we believe our resources are better spent elsewhere.”

For the fourth quarter, Amazon estimates net sales between $140 billion and $148 billion or to grow between 2% and 8% compared with fourth quarter 2021.

“As I look ahead to guidance for the fourth quarter, I think the biggest individual factor is still going to be foreign exchange,” Olsavsky said. “Foreign exchange is a bigger issue for us on our revenue growth in dollars than it is on our income.”

Amazon shares remain down 1.5% in trading today after they dropped 13% in extended trading last Thursday when the company issued its fourth-quarter forecast.

“As far as the new normal, we’re working very hard to make sure that current profitability is not the new normal,” Olsavsky said on the call, “and we’ll see how quickly we can make improvements.”

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