Amazon warns over festive sales

Amazon is cautious about Christmas sales

Amazon has reported a 48% rise in quarterly profits, but warned that its sales for the key Christmas trading period may miss Wall Street's targets.

The latest retailer to say that global consumer spending is slowing, Amazon's shares fell 14% in after-hours trading.

Reporting its results for the three months to 30 September, the online retail giant made a net profit of $118m (£73m), up from $80m a year earlier.

Lifted by a focus on reduced prices, its revenues rose 31% to $4.26bn.

'Pervasive downturn'

Amazon expects to see sales between $6bn and $7bn in the three months to the end of December, compared with previous market expectations of more than $7bn.

This is further confirmation that the economic downturn is much more pervasive than was earlier thought Analyst Jeffrey Lindsay of Sanford Bernstein

The firm's warning of weaker trading conditions in the key festive period follows after similar announcements by Apple and eBay.

Taken together it is a growing sign that the crisis in the financial sector is spreading to a wider economic downturn.

"Amazon is definitely signalling much worse returns in the fourth quarter," said analyst Jeffrey Lindsay of Sanford Bernstein.

"This is further confirmation that the economic downturn is much more pervasive than was earlier thought.

"Online retailers were thought to be immune to it, but this is an indication that that is far from true."