Amazon’s third-quarter profits fall

Profits for the third quarter fell 26% to $2.1bn (£1.63bn), while operating income fell to $3.2bn (£2.49bn) from $3.7bn (£2.88bn) the year before, as Amazon ramped up spending on its next-day delivery service.

The etail giant said it spent nearly $10bn (£7.78bn) on shipping costs in the most recent quarter, a 46% increase on costs from the same period last year.

Shares in the company fell 9% in after-hours trading following the figures, wiping some $80bn (£62.3bn) from Amazon’s stock market value.

Despite this, Amazon’s net sales for the quarter hit $70bn (£54.4bn), up 24% year on year.

Amazon also predicted it would see sales growth of between 11% and 20% in the upcoming quarter, which includes Christmas, Black Friday and Cyber Monday.

However, Amazon said fourth-quarter operating income was expected to be between $1.2bn (£930m) and $2.9bn (£2.26bn), compared with $3.8bn (£2.96bn) the previous year.

“We are ramping up to make our 25th holiday season the best ever for Prime customers — with millions of products available for free one-day delivery,” said Jeff Bezos, Amazon founder and chief executive.

“Customers love the transition of Prime from two days to one day — they’ve already ordered billions of items with free one-day delivery this year. It’s a big investment, and it’s the right long-term decision for customers.

“And although it’s counterintuitive, the fastest delivery speeds generate the least carbon emissions because these products ship from fulfilment centres very close to the customer — it simply becomes impractical to use air or long ground routes. Huge thanks to all the teams helping deliver for customers this holiday.”