Amazon Share Value Dips Despite Record Profits

Despite a record profit over the last quarter, Amazon shares are sliding after predicting a slower sales forecast approaching Christmas.

The digital shopping giant has said it will see a much lower growth of 10 or 20% over the next financial quarter, compared to last quarter’s 29% growth.

Stellar Profits

Sales in the last three months reached a whopping $56.6bn, resulting in record profits of almost $3bn.

It was the fourth quarter in a row of over $1 billion in profit, compared to last year’s total profit of $256m.

The rise in profits, despite an increase in costs of 21%, was largely influenced by investments outside of its retail monopoly.

In particular, profits were driven by Amazon Prime which offers original digital content to rival Netflix and AWS, which focuses on cloud services for businesses.

In the last quarter, the company released new Business Prime benefits for the markets in the USA, Germany and Japan. However retail remains the bulk of revenue, particularly in North America.

So Why The Share Price Drop?

Despite Amazon’s grip on the market, it is facing increased competition from other giants such as Walmart developing their online presence.

GlobalData Retail blamed the changes and development in the retail industry: “There is more online competition in online retail than there has ever been, and that competition is more effective than it has ever been.

The rise in costs has also worried investors.

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