Amazon shares plunged in after-hours trading on Tuesday as the online retail giant said net profit fell sharply in the third quarter and provided a weak outlook for the holiday period.
Shares in the compant based in Seattle, Washington, shed 12.68 percent to US$198.35 after Amazon released its earnings for the quarter that ended on Sept. 30.
Amazon said net profit declined 73 percent to US$63 million in the third quarter compared with the same quarter a year ago.
Amazon sharply increased spending in the quarter as it invested in the Kindle Fire, its rival to Apple’s iPad, digital content and infrastructure projects.
Earnings per share of US$0.14 were well below the US$0.24 per share expected by Wall Street analysts.
Revenue was up 44 percent to US$10.88 billion, slightly below the US$10.93 billion forecast by analysts.
Amazon said it expected revenue of between US$16.45 billion and US$18.65 billion in the current quarter, less than the midpoint of US$18.10 billion expected by analysts for the period which includes the Christmas holiday.
In a statement, Amazon founder and chief executive Jeff Bezos emphasized sales of the Kindle electronic book reader and orders for the new Kindle Fire tablet computer introduced last month.
Amazon unveiled three new Kindle e-readers and the Kindle Fire, its rival to Apple’s hot-selling iPad, on Sept. 28.
The Kindle Fire, which costs US$199, less than half the price of the cheapest iPad, is scheduled to ship to the US on Nov. 15.
“September 28 was the biggest order day ever for Kindle, even bigger than previous holiday peak days,” Bezos said.
“In the three weeks since launch, orders for electronic ink Kindles are double the previous launch and based on what we’re seeing with Kindle Fire pre-orders, we’re increasing capacity and building millions more than we’d already planned,” he said.
Amazon does not release actual sales figures for the Kindle.
Amazon said North American sales increased 44 percent to US$5.93 billion in the quarter compared with the same quarter last year, while international sales were also up 44 percent at US$4.94 billion.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to