Andrew Ross Sorkin speaks with Amazon CEO Andy Jassy during the New York Times DealBook Summit in the Appel Room at Jazz At Lincoln Center on November 30, 2022 in New York City.
Michael M. Santiago | Getty Images
Actions Amazon fell 5% on Friday, a day after the e-tailer posted soft growth in retail and cloud computing and gave lackluster guidance.
Its shares were hit harder than peers an apple and Alphabet, who also reported Thursday night. Shares of Apple were trading up about 4% Friday morning, while Alphabet was down about 1%. Both of these companies have missed at the top and the bottom.
Amazon’s fourth-quarter revenue rose 9% to $149.2 billion, beating analysts’ expectations of $145.8 billion. But revenue growth was overshadowed by another quarter of slower growth in Amazon’s core retail business and Amazon Web Services, which have been hit by a challenging economic environment.
Amazon said it expects revenue of $121 billion to $126 billion in the current quarter. Analysts expected 125 billion dollars.
“Consumers sound cautious, and Cloud’s cadence of slowdown appears to be landing in the ‘mid-teens’ for [the first quarter,]Analysts at Piper Sandler have an overweight rating on Amazon shares, wrote in a note on Friday.
“First and foremost, management’s comments suggest that AMZN is still going through a rough patch,” the analysts added.
Despite the near-term outlook, several analysts said they remained encouraged by CEO Andy Jassy’s efforts to control costs. They also believe that Amazon will prove that it can withstand economic turbulence and can continue to grow in the long term.
Jassy is working to get Amazon’s costs under control after a period of rampant expansion. Last month, the company said it would lay off more than 18,000 corporate employees. It has imposed a hiring freeze among its corporate ranks, scaled back some projects and suspended some brick-and-mortar stores and warehouse expansions.
“While the next few quarters are likely to remain volatile as a result of macroeconomic volatility, Amazon’s long-term narrative and compelling multi-year risk/reward should appeal to investors,” Goldman Sachs’ Eric Sheridan wrote in a Friday note.
Analyst sentiment was slightly different for Apple, which telegraphed that many of its problems are in the past and could explain why its stock is in the red. “Taking a step back, it’s rare to see Apple miss and decline for a quarter, but we think the long-term positives from today’s report outweigh the short-term negatives,” Morgan Stanley’s Eric Woodring wrote.
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