Amazon Delivers Mixed Q2 Results; Shares Fall 7% After-Hours

Amazon (AMZN) delivered mixed second-quarter results as earnings topped estimates, but revenues and third-quarter outlook fell short of analysts’ expectations. Net sales rose 27% to $113.1 billion but fell short of expectations as analysts were expecting revenues of $115.07 billion. AMZN closed at $3,599.92 on Thursday but fell 7.44% after-hours.

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Net income totaled $7.8 billion, or $15.12 per diluted share, versus $5.2 billion, or $10.3 per diluted share, reported the same quarter last year. Analysts were expecting earnings per share of $12.22. (See Amazon stock charts on TipRanks)

According to CEO Andy Jassy, Q2 results underscore growth in the consumer business, which saw a significant increase in items delivered. Additionally, the company continues to see growth in its cloud computing unit.

Jassy stated, “At the same time, AWS has helped so many businesses and governments maintain business continuity, and we’ve seen AWS growth reaccelerate as more companies bring forward plans to transform their businesses and move to the cloud.”

For the third quarter, Amazon is projecting net sales in the range of $106 – $112 billion, signaling growth of between 10% and 16% compared to the year-ago period. Operating income is expected between $2.5 billion and $6 billion, slightly below $6.2 billion generated in the same quarter last year. The e-commerce giant also expects to incur $1 billion in COVID-19 related costs.

Consensus among analysts is a Strong Buy based on 22 Buys. The average Amazon price target of $4,323.64 implies 20.1% upside potential to current levels.

AMZN scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.