Amazon Shares Slip in Extended Trading on Light 2nd Quarter Guidance

The online shopping titan reported better-than-expected 1st quarter earnings.

An Amazon Prime delivery person lifts packages while making a stop in Denver, Colo. AP Photo/David Zalubowski, File

Amazon shares slumped more than 4 percent in after-hours trading. While first quarter earnings topped Wall Street estimates, investors were disappointed in the company’s light forward guidance for the current quarter.

The online retail juggernaut generated $155.67 billion in revenue in the first three months of the year, up 9 percent from the same span a year ago. This was slightly better than analysts’ expectations of $155.04 billion.

Earnings per share—a financial metric highlighting how much profit the company generates for each share of stock—was $1.59, higher than Wall Street’s forecast of $1.36

Operating income climbed about 20 percent to $18.4 billion compared to the same time last year. Overall, net income reached $17.1 billion in the January–March period, up from $10.4 billion last year.

“We’re pleased with the start to 2025, especially our pace of innovation and progress in continuing to improve customer experiences,” Amazon president and CEO Andy Jassy said in the report.

Jassy touted the company’s plan to expand its delivery network to reach rural communities by next year. The online shopping behemoth anticipates to reach more than 13,000 zip codes by the next of 2026 and bolster delivery times for millions of customers.

“We’re continuing to find meaningful ways to make customers’ lives easier and better every day,” Jassy added.

While Amazon’s online ad business accounts for a small share of overall sales, advertising sales rocketed 19 percent in the first quarter, to $13.92 billion. This also beat the average analysts’ forecast.

Traders were disappointed as the website’s cloud unit, Amazon Web Services, weakened in the three-month period. Cloud revenue growth rose 17 percent, to $29.27 billion, missing the market estimate of 17.4 percent. Amazon Web Services is the largest cloud provider.

Market watchers also paid close attention to the second-quarter guidance.

Amazon projects that second quarter revenue will be between $159 billion and $164 billion, compared to the market consensus of $161 billion. Operating income will come in between $13.0 billion and $17.5 billion, compared with the $14.7 billion estimate.

Amazon’s stock is down 17 percent this year. Shares finished the May 1 trading session up 3 percent to above $190. In after hours trading, the stock fell as much as 5 percent before paring some of its losses.

Investors had been waiting for the company to provide insights into the impacts of President Donald Trump’s tariffs on the platform.

But while Wall Street analysts see a 31.5 percent upside to Amazon stock, many of them also lowered their price targets last month on tariff-related concerns.

Jamie Meyers, a senior analyst at Laffer Tengler Investments, is optimistic about Amazon’s prospects, citing its “start up mentality.”

“As large as Amazon is, it is an ever-changing, adaptable business model,” Meyers said in a note to The Epoch Times. “While the company has grown in size and stature, the startup mentality is still there.”

Last month, Jassy penned a letter to shareholders, emphasizing the company’s aim tear down bureaucratic layers.

Andy Jassy, CEO of Amazon Web Services, speaks at the WSJD Live conference in Laguna Beach, Calif., on Oct. 25, 2016. Mike Blake/Reuters

“As leaders, we don’t always see the red tape buried deep in our organizations, but we can sure as heck eliminate it when we do,” Jassy said. “We’ve already made over 375 changes based on this feedback. We need to move fast, and we are committed to rooting out bureaucracy that ties up time and dispirits our teammates.”

Tariff Dustup

This comes as the online retail juggernaut experienced a tariff-related spat with the Trump administration after PunchBowl News reported that the website was preparing to display the costs of tariffs on product prices.

White House press secretary Karoline Leavitt called the move a “hostile and political act.”

Amazon later denied the report, confirming it never considered spotlighting tariff-related information on the main site.

“The team that runs our ultra-low-cost Amazon Haul store considered the idea of listing import charges on certain products. This was never approved and is not going to happen,” Amazon spokesperson Tim Doyle told The Epoch Times in an emailed statement.

Trump told reporters on Air Force One that Jeff Bezos, Amazon’s executive chairman, “did the right thing” by not moving ahead with a tariff display.

“Jeff Bezos was very nice, he was terrific. He solved the problem very quickly. And he did the right thing, and he’s a good guy,” the president said.