Amazon.com Inc. fell short of median revenue estimates in the second quarter as more Americans got vaccinated, returned to stores and generally spent less time shopping on their devices.
The world’s largest e-tailer reported diluted earnings per share of $15.12, handily beating the median estimate of $12.22, the company said late Thursday.
However, Amazon (NASDAQ:AMZN) reported revenue of $113.08 billion, slightly below the estimate of $115.07 billion. The year-over-year growth rate, which had been running at a 20% clip in preceding quarters, moderated to a pace in the mid-teens range, the Seattle-based company said.
CFO Brian Olsavsky said Amazon’s customers underwent a “transition” during the quarter with COVID-19 vaccinations increasing and more options for consumers to spend their disposable income. Third-quarter sales are expected to increase 10% to 16%, and come in between $106 billion and $112 billion, Amazon said.
Operating income increased to $7.7 billion in the second quarter, compared with $5.8 billion in second quarter 2020. Amazon guided third-quarter operating income to between $2.5 billion and $6 billion, compared with $6.2 billion in the third quarter of 2020.
Operating income is expected to be between $2.5 billion and $6 billion, compared with $6.2 billion in third quarter 2020. This guidance assumes approximately $1 billion of costs related to COVID-19 compliance.
Year-on-year shipping costs rose 30% to $17.7 billion, Amazon said. Fulfillment costs, which includes warehouse and distribution capacity, jumped to $17.6 billion from $13.8 billion, Amazon said. The company said that its one-day shipping performance, which was launched before the pandemic, has not yet returned to pre-pandemic levels.
The company has also been pressured by rising labor costs, and Olsavsky said he doesn’t expect those expenses to abate for the foreseeable future.
Amazon shares fell more than 7% in after-hours trading following the release of the results.