Amazon has reported disappointing third quarter results, and warned investors to expect a potentially weak fourth quarter. However, its AWS division continues to grow as it maintains a strong position in the public cloud market.
The firm's revenue for the quarter did hit expectations, with a 29 per cent lift to $32.7bn, compared with $25.4bn in third quarter 2015, however earnings per share were 52 cents, far short of the 78 cents which had been expected.
Amazon's costs also rose, with operating expenses climbing 31.5 per cent to $10.94bn following heavy investment in Amazon Web Services, the expansion of its Prime programme internationally, and its warehouse and delivery infrastructure.
The firm's shares fell by more than five per cent following the announcement.
The outlook for the final quarter of 2016 was worse than expected, with Amazon forecasting net sales of between $42bn and $45.5bn.
Most industry analysts had expected fourth quarter sales of at least $44.58bn, partly due to the Christmas period which falls in the quarter and boosts sales significantly.
With regards the Amazon Web Services (AWS) division it reported net sales for the three months of $3.3bn, up strongly from the $2bn it made in the same period last year.
This helped AWS double profits to $861m for Q3, up from $428m in the same period last year.
This puts AWS total yearly revenues for the first three quarters of the year at $8.8bn and total profits at $2,182bn.
The results come amid ongoing efforts by AWS to boost its operations, most notably with its recent deal to host VMware services in the cloud, in a move that could entice many more new customers to choose its cloud over rivals Microsoft and Google.
However, its rival are also doing all they can to entice or even steal customers, with both touting new services and planning to open new availability zones across the globe throughout 2017.
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