Amazon Q2 earnings: Sales growth slows as new CEO Andy Jassy takes over
Amazon is also forecasting weaker sales growth in the upcoming quarter. The company predicts net sales will increase between 10% and 16% from the prior year. That would mark a notable slowdown compared to the 37% sales growth it reported in the third quarter of 2020.
Despite the sales miss, profits beat expectations at $7.8 billion, thanks in part to the performance of Jassy’s AWS, which posted more than $4 billion in profit for the quarter.
But the mixed results highlight the challenge Jassy now faces in the top spot to maintain Amazon’s remarkable sales and profit growth that turned it into one of the world’s most valuable businesses. Preserving the company’s growth rate could be especially tricky after demand for its products and services exploded during the Covid-19 pandemic as customers and businesses leaned on Amazon’s services.
Amazon’s guidance highlighted multiple risks to the company, including the possibility that consumers would cut back on spending if the economy takes a hit as Covid-19 surges again. It also noted the risk of “actions taken by governments” in response to the pandemic.
Correction: An earlier version misstated which day Amazon reported earnings.