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Oct 29 (Reuters) – Amazon.com projected fourth-quarter revenue largely below Wall Street estimates on Thursday, raising concerns over muted retail demand over the crucial holiday season as higher household costs amid rising inflation pressure consumer spending.
The company expects revenue of between $240.0 billion and $247.0 billion in the fourth quarter, compared with analysts’ average estimate of $244.51 billion, according to data compiled by LSEG.
Revenue at Amazon Web Services rose 39% to $46 billion in the third quarter ended September, compared with analysts’ estimate for a 38.2% increase to $45.61 billion, according to data compiled by LSEG. AWS revenue recorded a 37% jump in the second quarter.
The downbeat fourth-quarter outlook signals US retailers could face pain in the holiday season, as consumers tighten shopping budgets amid higher gas prices and the rising cost of living.
Still, recent industry forecasts predict holiday sales will accelerate from last year. The National Retail Federation earlier this month predicted a 4.2% jump in total US holiday season sales.
While retail sales account for the majority of Amazon’s revenue, investor focus has shifted sharply towards its cloud computing business, Amazon Web Services in recent years, as the tech giant spends heavily to build out data centers and compete in the global AI race.
At its ecommerce business, Amazon has been rolling out faster delivery services globally and expanding to more rural areas in the US to draw more shoppers.
(Reporting by Deborah Sophia in Bengaluru; Editing by Pooja Desai)
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