SEATTLE — Amazon’s third-quarter net profit, ended Sept. 30, fell to $3.2 billion from $6.3 billion in the third quarter of 2020, while net sales rose 15% to $110.8 billion in the third quarter, compared to $96.1 billion in the same period last year.
Earnings per share were $6.23 per diluted share this quarter, compared to $12.63 per diluted share in the third quarter of last year.
“We have always said that when faced with the choice between maximizing short-term profits and what is best for long-term customers, we will choose the latter, and you can see that in every phase of this pandemic. “said Andy Jassy, CEO of Amazon.
“To cite just one example, we have almost doubled the size of our distribution network since the start of the pandemic. In the fourth quarter, we expect to incur several billion dollars of additional costs in our consumer businesses as we manage labor shortages, rising labor costs, global supply chain issues and increased transportation and shipping costs,” he added.
Amazon kicked off the holiday earlier this year, announcing Black Friday-worthy deals on October 4, including thousands of deals from independent sellers and artisan artisans and Amazon’s largest selection of gift guides. Amazon also launched new features such as the Holiday Gift List to allow customers to create and share a list of gift ideas for everyone in their household. The company also unveiled its new holiday preparation store, which offers the best products in different categories to help customers prepare for seasonal celebrations.
In its forecast for the upcoming fourth quarter, Amazon estimates net sales will be between $130 billion and $140 billion, a growth rate of 4% to 12% from the fourth quarter of last year. The forecast assumes an unfavorable impact from exchange rates.
“We’re going to be working on our cost structure for a while,” Amazon chief financial officer Brian Olsavsky said on the quarterly earnings call. “COVID-19 costs are $1.5 billion lower this year than last year. But we’ll have $4 billion out of the way: $2 billion for labor and inflation and $2 billion in operational disruption due to increased transportation costs.
Olsavsky also said that as the company moves into a more typical buffer, he anticipates it will be able to operate with more slack in the system and be able to get back to a more normal pace.