Oct 24, 2019

Amazon profits hit by rising shipping costs

Amazon delivered another quarter of sales growth above 20%, but a spike in shipping costs cut the firm's bottom line. Amazon boss Jeff Bezos said the company's push to offer one-day shipping to its Prime members, which has contributed to increased costs, will pay off. Amazon's overall revenue gain occurred despite slowing growth in the firm's cloud computing division, Amazon Web Services. Last year, the unit, which is credited with lifting Amazon to profitability, posted year-on-year growth of 46%. The deceleration is a potentially worrisome sign for investors looking at the bottom line, said Andrew Lipsman, an analyst at eMarketer, who called the quarter "a very mixed bag". "AWS has fuelled Amazon's margin expansion of late but the continued softening in growth rates will weigh on the company's profits if they can't reverse the trend," he said.

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