Amazon reported a slower revenue growth and declining profit figures for the third quarter, in line with expectations. Going ahead, the company said it will likely incur “several billion” dollars’ worth of additional costs at its consumer business, to make up for labour supply shortages, increased wage costs, global supply chain issues and increased freight and shipping costs.
Revenues for the quarter rose 15 percent from the year before to USD 110.8 billion while the operating profit fell to USD 4.9 billion from 6.2 billion and the net profit halved to USD 3.2 billion from 6.3 billion. The operating cash flow slipped 1 percent to USD 54.7 billion on a trailing 12-month basis, from 55.3 billion the year earlier. The free cash flow was lower at USD 2.6 billion for the trailing 12-months, against 29.5 billion.
Looking ahead, Amazon is guiding for sequentially improved revenues for the fourth quarter, at USD 130-140 billion. The operating profit is expected at a lackluster USD 0-3.0 billion.
Inroads at gaming, Prime Video
The company made inroads in gaming, with its New World multiplayer online PC game becoming the highest-played new game on Steam this year so far. On Prime Video, The Lord of the Rings series will premiere on 2 September 2022, amid the company’s continuing focus on new content. Prime Video launched 28 local originals internationally.
AWS also continued to grow, with revenues at the unit growing to USD 16.11 billion from 11.60 billion and the operating profit lifting to USD 4.88 billion from 3.53 billion. Operating expenses also increased, going higher to USD 11.23 billion form 8.06 billion.
Fund for school tuition in the US, to attract workers
The company also announced it will fund full college tuition, high school diplomas, GED diplomas and English as a Second Language proficiency certifications for its US front-line employees through its Career Choice programme. More than 750,000 operations employees will be eligible for the programme from January. The move is part of USD 1.2 billion Upskilling 2025 project to provide free skills training the company’s US employees over the next four years. The move also comes as the company seeks to increase employee retention. Amazon said it is offering 150,000 seasonal roles in the US, over 50,000 roles in Europe and over 11,000 seasonal roles in India. The job ad within the company’s results saying average starting pay will start at USD 18 per hour in the US, with bonuses and other benefits.
