Amazon has warned that its profits could be all but wiped out during the crucial golden quarter in a bleak prediction that stunned Wall Street. 

Amazon Christmas parcel

Shares in Amazon dropped 14.4% after the warning

The etail titan’s boss Andy Jassy cautioned that there was “a lot happening in the macro-economic environment” that could hammer its top and bottom lines during the holiday season. 

Amazon warned the market that sales may only come in between $140bn (£121.28bn) and $148bn (£128.21bn) during its fourth quarter. Analysts had previously expected $155.15bn (£134.4bn). 

Operating profit could be anywhere between nothing and $4bn (£3.47bn), it said, as uncertainty swirls around consumer spending this Christmas. 

The gloomy outlook sent the online Goliath’s market capitalisation tumbling. 

Shares in the etailer dropped 14.4%, or $15.97 (£13.83) to $94.99 (£82.29) during out-of-hours trading. 

It came as Amazon reported a 9% drop in third-quarter profits to $2.87bn (£2.49bn) despite a 15% uplift in net sales to $127.1bn (£110.1bn). 

The etailer booked an operating loss of $400m (£347m) in its North American business, compared with an operating income of $900m (£779.98m) during the same period last year.

Its international arm, which includes its UK business, suffered widening losses of $2.5bn (£2.17bn) compared with $900m (£779.98m) a year ago. 

However, Jassy said he was “encouraged by the steady progress we’re making on lowering costs in our stores fulfilment network” and that the business has “a set of initiatives that we’re methodically working through that we believe will yield a stronger cost structure for the business moving forward”.

He added: “There is obviously a lot happening in the macro-economic environment and we’ll balance our investments to be more streamlined without compromising our key long-term, strategic bets. 

“What won’t change is our maniacal focus on the customer experience and we feel confident that we’re ready to deliver a great experience for customers this holiday shopping season.”

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