FirstFT: Amazon revenue misses Wall Street target
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Amazon’s revenue rose in the second quarter but fell short of Wall Street’s lofty expectations, even though the ecommerce giant increased its overall profits by 50 per cent compared with the same period last year.
Net income for the three months from April to June came in at $7.8bn, or $15.12 per diluted share, comfortably beating analysts’ expectations of $6.4bn.
Revenues increased 27 per cent from last year to $113bn, falling short of forecasts for around $115bn, according to consensus data from FactSet.
The revenue miss comes despite Amazon bringing forward its flagship Prime Day sales event so that it fell in the second quarter. Shares fell by more than 5 per cent in after-hours trading.
Five more stories in the news
1. US economic growth weaker than expected US economic growth rose slightly in the second quarter to 6.5 per cent on an annualised basis, a weaker-than-expected increase as strong consumption was partially offset by lagging property investments and inventory drawdowns.
2. Robinhood shares stumble in trading debut The popular app that brought fee-free trading to millions of Americans saw lacklustre investor demand on its trading debut. Shares opened at $38 apiece, the bottom of a target range marketed to buyers in its initial public offering before dropping as much as 12 per cent to $33.35 at midday in New York.
3. China seeks to ease international investor fears Regulators in Beijing held a call with executives from global investors, Wall Street banks and Chinese financial groups Wednesday night, according to three people familiar with the matter, to ease concerns after tough new restrictions on private education companies sent shockwaves through markets. News of the call boosted Chinese shares today.
In related news: SoftBank is selling a large chunk of its stake in ride-hailing group Uber as the world’s most aggressive technology investor wrestles with heavy losses from a big bet on China’s Didi Chuxing.
4. Nikola founder charged with making false statements Trevor Milton has been charged by US federal prosecutors with misleading investors about the electric truck start-up’s products and technology. Milton, who stepped down as chair of Nikola last year, entered a plea of not guilty and was released on $100m bail.
5. Scarlett Johansson sues Disney The US actress has sued Disney, accusing the Marvel owner of breaching her contract by releasing the Black Widow film in cinemas and on its streaming service on the same day, depressing box-office sales.
Tokyo Olympics round-up
Japan has won two Olympic golds in skateboarding, an activity formally banned in most of the country’s public spaces, amid a battle over the sport’s future.
China stormed to victory in the women’s 4 x 200m freestyle relay, leading from the start to finish to post a world record time of 7:40.33.
Reigning pole vault world champion Sam Kendricks pulled out of the Games after testing positive for Covid-19. Rival vaulter Germán Chiaraviglio from Argentina was also forced to withdraw after a positive test.
American gymnast Sunisa Lee took home gold in the Olympic all-around event after a tumultuous year that at one point made her want to quit.
Rugby union is seeking to capitalise on its Olympic popularity by starting discussions for private equity investment worth hundreds of millions of pounds. (FT, AP)
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The day ahead
Japan industrial production The country’s factory output figures will be released today. In May, a sharp fall in car production spurred Japan’s biggest monthly industrial production drop in a year — a loss of 5.9 per cent compared with April. (FT, Reuters)
US oil majors report earnings Exxon and Chevron are both expected to unveil bumper second-quarter earnings when they report on Friday. Stay up to date on the sector’s latest news with our Energy Source newsletter. Sign up here.
Eurozone GDP Data out Friday is expected to show that the eurozone’s GDP increased at its fastest rate in two decades, but there are fears governments could cut support too soon.
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What else we’re reading
More questions than answers in a Hong Kong courtroom The mystery of a mob attack on commuters and pro-democracy protesters is still under scrutiny two years later, writes Nicolle Liu. No mastermind has been identified and only eight attackers have been brought to court, despite thousands of arrests of pro-democracy activists.
Music labels split over Spotify royalty plan Towards the end of last year, Spotify began asking record companies to participate in “Discovery Mode”, through which Spotify prioritises an artist’s songs on select music feeds in exchange for reduced royalties. Yet so far the reaction from the major labels has ranged from lip service to staunch opposition.
Republicans have become the party of nihilism The party as a whole now has one truth, which is whatever Donald Trump says, even if it is different after breakfast than before, writes Edward Luce. The finality of Trump’s ownership became clear this week at the hearing into the January 6 assault on Capitol Hill. Read more from Edward in our Swamp Notes newsletter. Sign up here.
Lebanon’s year from hell A blast in Lebanon’s port on August 4 2020 killed more than 200 people, injured thousands and caused some $4bn worth of damage. It should have been a nadir for Lebanon. Instead, it was the beginning of a further fall, a year-long plunge into economic chaos, writes Chloe Cornish, who lives a mile from where the blast took place.
‘A Tesla for every referral’ In the past 18 months, at least 69 start-ups have raised some $7bn to begin buying up successful Amazon sellers, in the hope of building a collection of top brands. Some, like Acquco are resorting to gimmicks, offering a Tesla for each referred business it acquires to help it stand out.
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