Amazon’s latest financial postings disappoint Wall Street as it continues to spend heavily
E-commerce giant Amazon has posted quarterly results that reflect its heavy spending on the Kindle product range and investments in new distribution centres.
The figures did not sit well with investors, missing Wall Street expectations.
For the second quarter ending 30 June, Amazon posted a net loss of $7m (£4.5m), compared to a year-ago profit of $7m (£4.5m).
Its surprise loss in the quarter was a result of rising operational expenses and currency issues. Operating expenses rose 23 percent to $15.63bn (£10.1bn) from $12.73bn (£8.3bn) a year ago.
But there was better news on the revenue side, after Amazon saw a healthy 22 percent rise in sales to $15.7bn (£10.2bn), compared to $12.8bn (£8.3bn) in the same quarter of 2012. North American sales climbed 30 percent to $9.5bn (£6.2bn), while international revenue increased 13 percent to $6.21bn (£4bn).
Yet the figures disappointed investors on Wall Street, who have witnessed a steady decline in Amazon profits of late. Analysts had expected a profit of $0.05 (£0.03) a share. Investors were also expecting revenues of $15.73bn (£10.2bn).
Shares in Amazon are currently trading at $303.40 (£197) on the Nasdaq at the time of publication, but had fallen to $294.03 (£191) in after-hours trading on Thursday.
The results reflect the high spending that Amazon continues to undertake as it funds its challenge to the Apple iPad and rival e-readers with its Kindle device range.
“We’re so grateful to our customers for their response to Kindle devices and our digital ecosystem. This past quarter, our top 10 selling items worldwide were all digital products – Kindles, Kindle Fire HDs, accessories and digital content,” said Jeff Bezos, founder and CEO of Amazon.
“The Kindle service keeps getting better,” Bezos added in a statement. “The Kindle Store now offers millions of titles including more than 350,000 exclusives that you won’t find anywhere else. Prime Instant Video has surpassed 40,000 titles, including many premium exclusives like Downton Abbey and Under the Dome. And we’ve added more than a thousand books, games, educational apps, movies and TV shows to Kindle FreeTime Unlimited, bringing together in one place all the types of content kids and parents love.”
Looking forward to the third quarter, Amazon said it expected net sales to be between $15.45bn (£10.03bn) and $17.15bn (£11.14bn), or to grow between 12 percent and 24 percent. It also expected an operating loss of between $440 million (£285m) and $65 million (£42m), compared to $28 million (£18.2m) in third quarter 2012.
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