Amazon delivers a mixed bag of 2Q results, shares slide

This April 16, 2020 shows the Amazon logo in Douai, northern France. Amazon on Thursday, July 29, 2021 turned in a mixed bag of results for its fiscal second quarter, coming up short of Wall Street expectations in revenue but beating on profits. (AP Photo/Michel Spingler, File)

NEW YORK (AP) — Amazon on Thursday turned in a mixed bag of results for its fiscal second quarter, coming up short of Wall Street expectations in revenue but beating on profits.

The world's largest online retailer also offered a revenue forecast for its current quarter that fell short of analysts’ projections. It said revenue will be in the range of $106 billion to $112 billion for the third quarter. Analysts were looking for $119.3 billion.

Shares in Amazon.com Inc. fell more than 6% in after-market trading.

Amazon is one of the few retailers that has prospered during the pandemic. As physical stores that sold non-essential goods like clothing temporarily closed, people stuck at home turned to Amazon to buy groceries, cleaning supplies and more.

Chief Financial Officer Brian Olsavsky told reporters during a call following Thursday's earnings report that the slowdown in sales is a result of the company lapping against last year's huge pandemic-induced COVID-19 shopping binges. The slowdown also reflects that people, particularly in Europe and the U.S., are more mobile and are doing other things besides shopping, he added.

Olsavsky noted that in May a year ago, the revenue growth rate jumped in the 35% to 45% range from what had been a 20% to 21% range during the pre-pandemic days. He believes that sales increases will settle in the mid-teen percentage range.

Olsavsky told reporters that surging cases of the new delta variant is pushing the company to get more workers be vaccinated. It's also working with local authorities on safety measures. He says that could mean requiring workers to wear masks even if vaccinated in some areas.

“The bigger goal is to stamp this out and get people vaccinated and have a successful return to life," Olsavsky said.

During the three-month period ended June 30, the Seattle-based company reported a profit of $7.78 billion, or $15.12 per share, compared with $5.24 billion, or $10.30 a share, during the year-ago period. Revenue jumped 27% to $113.08 billion.

Analysts surveyed by FactSet on average expected $115.42 billion in quarterly revenue and per-share earnings of $12.28.

Besides online shopping, 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 37% 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 87%.

Amazon held its Prime Day from June 21 to June 22, the earliest it had ever held the sales event due as it didn’t want any distractions from the Tokyo Olympics, which is going on now. Last year, Amazon postponed Prime Day to October because of the pandemic and used it to kick off holiday shopping early. Olsavsky told reporters that this year's Prime Day was very strong.

It was the company’s last quarter with founder Jeff Bezos as CEO. He stepped down to become executive chairman in early July. Andrew Jassy, who headed its cloud-computing unit, Amazon Web Services, succeeded him.