Amazon earnings are in, and it’s not looking good for the stock.
Investors were focused on the company’s capex-spending forecast of $200 billion for the year, which came in well above the average analyst estimate of $146.11 billion.
“We’re going to invest aggressively here. And we’re going to invest to be the leader in this space,” CEO Andy Jassy said on the company’s earnings call on Thursday.
It overshadowed a report that was otherwise largely in line with forecasts. Net sales came in at $213.39 billion, compared to an estimate of $211.49 billion. The company’s closely watched AWS cloud unit also came in slightly stronger than anticipated.
Earnings per share came in at $1.95, just below the $1.96 estimate. In terms of guidance, Amazon sees net sales of $173.5 billion to $178.5 billion, in line with Wall Street’s expectation of $175.54 billion.
Jassy touted the AWS cloud unit’s 24% year-over-year growth and its growing chip business.
“It’s early days with what’s possible here,” he said of the chip business on the earnings call.
Jassy also pointed to Amazon’s plans to increase its already fast shipping speeds, including through its 30-minute delivery tests in the US.
Amazon also gave more insight into costs after a recent spate of layoffs. Fourth-quarter operating income took a hit from $730 million in severance costs, as well as $610 million in asset impairments on its physical stores business and $1.1 billion to resolve a tax dispute in Italy.
The stock dropped sharply after hours, falling about 10% after dropping 5% during Thursday’s session.
