Amazon takes a nosedive after reporting a less profitable quarter than expected
The Seattle-based company earlier this year said it planned to make one-day shipping the new standard for Amazon Prime, the membership program that drives sales on Amazon.com and offers
members perks such as fast free shipping and access to other Amazon services, such as the Prime Video streaming service."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," Bezos said in a prepared statement."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.
Amazon CEO Jeff Bezos. Clodagh Kilcoyne/Reuters

Amazon reported third-quarter earnings on Thursday, missing Wall Street estimates on profit - sending the stock tumbling as much as 8.62% after the release.

Amazon slightly beat revenue estimates, reporting $70 billion in revenue for the quarter, up 24% from the year-ago period.

Amazon Web Services' revenue growth rate slowed once again to 35%.

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Amazon reported third-quarter earnings after the market closed on Thursday, beating Wall Street revenue estimates but missing on profit.

Amazon shares were down as much as 8.62% in after-hours trading immediately after the earnings release.

Here's what the company reported for the third quarter:

Revenue : $70 billion, up 24% from the same quarter last year. Analysts estimated $68.8 billion.

: $70 billion, up 24% from the same quarter last year. Analysts estimated $68.8 billion. Earnings per share: $4.23. Wall Street expected $4.62 per share.

$4.23. Wall Street expected $4.62 per share. AWS revenue: $9 billion, up 35% compared with the third quarter of 2018.

The Seattle-based company earlier this year said it planned to make one-day shipping the new standard for Amazon Prime, the membership program that drives sales on Amazon.com and offers members perks such as fast free shipping and access to other Amazon services, such as the Prime Video streaming service.

Analysts are searching for indications into how much Amazon is spending on the move to one-day shipping after the company earlier this year said it was costing more than anticipated.

Amazon CEO Jeff Bezos in a prepared statement acknowledged the company's planned transition to one-day shipping but did not appear to reveal details on expenses related to that shift. Amazon may reveal more details on an earnings call scheduled for 2:30 p.m. PT on Thursday.

Amazon's massively profitable cloud business, Amazon Web Services, is also a point of interest, as it seeks to retain its dominance in the market against challengers including Microsoft Azure.

AWS revenue is up 35% since the same quarter last year to nearly $9 billion. The unit's growth rate is down compared to the second quarter, in which the business' revenue grew 37%. This follows a slump from a 42% annual growth rate in the first quarter and a 46% rate in the fourth quarter of last year.

AWS was responsible for nearly 72% of Amazon's nearly $3.2 billion in operating income.

"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," Bezos said in a prepared statement.

"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 fulfillment centers 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," he said.

We'll be reporting the earnings live, so refresh for updates.

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