Amazon shares plummet after dismal sales forecast

The stock price of Amazon plummeted 20 per cent in after-hours trading on Thursday after the company issued a gloomy revenue forecast.

For the October to December period, the group expects revenue to be between $140 billion and $48 billion. According to data from S&P Capital IQ, investors were expecting more than $150 billion.

The revenue in the third quarter was up 15 per cent compared to the same period last year, but slightly softer than Wall Street expected.

Amazon's net income fell year-on-year to $2.9 billion compared with $3.2 billion a year ago and included a $1.1 billion boost in non-operating income from its stake in Rivian

This year has been difficult for the company's traditional core business of selling products online and getting them to customer's doorstep. The revenue for Amazon's online store has been decreasing.

Its stock price has fallen by 35 percent since the beginning of the year.

Andy Jassy said he was encouraged by the progress being made in lowering costs.

He said that they would balance their investments to be more streamlined without compromising their long-term strategic bets.

While not announcing a large-scale hiring freeze or sweeping cuts, Amazon has slowed hiring in some units, and in recent weeks closed a number of experimental projects, such as its delivery robot concept, Scout.

Executives admitted earlier this year that they had over expanded on warehouse leases and other infrastructure investments.

Spending has continued to increase in priority areas such as acquiring sports and entertainment content for its Prime Video service and building out its healthcare operation. It was announced in July that Amazon would acquire One Medical.

The company beat analysts' expectations with a 22 per cent increase in revenue for the third quarter.

Despite warnings that a strong US dollar and other macroeconomic pressures would be a drag on consumer spending, shares of the Canadian group, which provides a software platform for online retailers, jumped by 17 percent in Thursday's trading.