Even the market leaders miss the mark sometimes.
After a year of reporting record profits quarter after quarter, Amazon (NASDAQ: AMZN) finally hit the wall.
The company reported a record profit of more than $10 billion last year, beating its previous best by more than 300%. During last year’s second quarter, the retailor reported a record profit, beating even the year-end holiday quarter. In each of the following three quarters, it reported yet another record profit.
After years of missing analyst estimates, it seemed like Amazon had finally gotten its act together and just couldn’t miss.
That streak came to an end yesterday.
Even though revenue rose 19.9% year-over-year to $63.4 billion, the dominant e-commerce player came up $0.36 short on earnings per share, hitting just $5.22.
That was a big miss, sending shares plunging before the announcement was even finished and costing investors more than a $1 billion in lost gains.
It’s another example of a key lesson for investors: Just because a company is an industry leader doesn’t mean it’s guaranteed to be a money-making stock.
Amazon hasn’t been the only notable miss. While 79% of companies have reported positive earnings surprises (with 16% of S&P 500 companies reporting so far), earnings per share have declined 1.9%.
Odds are there will be more misses to come.
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Here’s to Profits,