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Ecommerce and cloud computing company Amazon‘s muted third-quarter earnings as well as disappointing fourth-quarter projections led the company’s stock to plummet as much as 20% in after-hours trading before a recovery to 13%.

The company reported a fall in net income (commonly referred to as net profit) to $2.9 billion versus $3.2 billion last year, while operating income decreased to $2.5 billion compared to $4.9 billion the same quarter last year.

The technology giant has projected operating income for the current quarter to fall between $0 billion and $4 billion compared to $3.5 billion in Q4 2021 and analysts’ expectations of $5 billion, stating that there is “a lot happening in the macroeconomic environment”. It expects revenues to be between $140 billion and $148 billion in the fourth quarter, including its flagship Prime Day sales figures.

“We’re also encouraged by the steady progress we’re making on lowering costs in our stores fulfillment network, and have a set of initiatives that we’re methodically working through that we believe will yield a stronger cost structure for the business moving forward.

“There is obviously a lot happening in the macroeconomic environment, and we’ll balance our investments to be more streamlined without compromising our key long-term, strategic bets,” Amazon CEO Andy Jassy said in an earnings statement.

Amazon did not reveal any India-specific numbers.

Amazon’s results come a day after Meta, Google parent Alphabet and Microsoft announced poor third-quarter results owing to tough macroeconomic conditions. Meta’s profit last quarter dropped over 50% while Microsoft’s net income fell 14% hurt by a fall in demand for PCs. These major tech giants also warned of slower growths and higher costs in the future quarters.

Amazon’s spending on shipping climbed 10% to $19.9 billion in Q3 2022 on account of soaring energy prices, an important development as the world’s largest ecommerce company pushes for one-day deliveries. The company’s shares are already down over 35% this year.

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Revenue from Amazon’s cloud services business AWS, a segment that helps the company offset weak retail results, rose 28% year-on-year to $20.54 billion. This is the first time since 2020 that the cloud segment showed a revenue growth of less than 30%. 

The company’s advertising revenue last quarter grew 25% to $9.5 billion compared to the year-ago period while other technology moguls including Meta, Alphabet, and Snap reported drops in ad revenue.

“We are seeing signs all around that, again, people’s budgets are tight, inflation is still high, energy costs are an additional layer on top of that caused by other issues,” he said. “We are preparing for what could be a slower growth period, like most companies,” Chief Financial Officer Brian Olsavsky said.