Shares of Amazon (AMZN) are down after the e-commerce giant issued weak forward guidance for this year’s second quarter.
The guidance overwhelmed what was otherwise a strong first-quarter print from Amazon. The Seattle-based company reported earnings per share (EPS) of $1.59, which was ahead of the $1.36 forecast on Wall Street. Revenue in the January through March period totaled $155.67 billion, which topped the consensus estimate of $155.04 billion among analysts that cover the company.
In addition to the top and bottom line numbers, Amazon also reported that its Amazon Web Services (AWS) cloud computing unit brought in $29.30 billion of revenue during Q1, which was below the $29.42 billion expected on Wall Street. Advertising sales in the quarter totaled $13.92 billion, which was ahead of the $13.74 billion that was anticipated. The company’s online ad revenue grew 19% from a year ago.
Amazon’s online advertising business has grown in recent years to become the third-biggest platform in the global digital advertising market, behind only Alphabet (GOOGL) and Meta Platforms (META). Technology companies with online ad businesses have reported solid first-quarter earnings, but warned of potential difficulties ahead.
Despite the largely positive Q1 results, Amazon issued underwhelming guidance for the current second quarter that overshadowed its print. Management said that they expect sales this quarter to be between $159 billion and $164 billion, representing growth of 7% to 11%. Wall Street was looking for $160.9 billion of Q2 2025 revenue.
The company also said that it expects second quarter operating income to be between $13 billion and $17.5 billion, which is below the $17.64 billion consensus forecast of analysts who track the company’s progress. The tepid guidance sent AMZN stock down about 4% in after hours trading.
So far in 2025, AMZN stock has declined 13%.