Amazon price target cut after weak quarter, but AWS growth shines

Amazon reported quarterly revenue and earnings below analyst expectations Thursday, causing shares to fall about 6.5% in after-hours trading. The miss was driven by weaker retail sales and advertising revenue. Revenue rose 12% year over year to $201.9 billion, missing the $202.3 billion consensus, while GAAP earnings per share fell 3% to $1.89 versus the $1.96 estimate. AWS revenue grew 39.3% to $45.98 billion, its fastest pace in nearly five years, with operating income beating forecasts. The company guided fourth-quarter revenue to a midpoint of $243.5 billion, below the $244.16 billion consensus. Amazon reiterated $220 billion in capital expenditures for this year, while free cash flow over the past 12 months was negative $42.4 billion.