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Monday, March 18, 2024
March 18, 2024

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Amazon shares shrink after big 2Q loss

The Columbian
Published:

Amazon.com shares sank in after-hours trading after the online retail giant posted a second-quarter loss that was larger than Wall Street expected.

Amazon reported $19.34 billion in revenue, a 23 percent gain. It lost $126 million, or 27 cents a share, compared with a $7 million loss, or 2 cents a share, in the year-ago period.

Analysts expected the company to lose 15 cents a share on sales of $19.3 billion.

Amazon shares fell $26.29 to $332.32 in after hours trading.

For the third quarter, Amazon said sales should be between $19.7 billion and $21.5 billion, reflecting growth between 15 percent to 26 percent compared with third quarter 2013. The company said operating losses should be between $410 million and $810 million, compared with $25 million in the third quarter of 2013.

Amazon Chief Financial Officer Tom Szkutak noted that the company continues to be interested in investing in new market opportunities, even at the expense of short-term financial gains. And Amazon continues to spend on a new breed of warehouses, called sortation centers. It plans to open 15 of them this year.

The company is also willing to generate lower sales and profit numbers by reducing prices for its Amazon Web Services technology, in order to maintain its leading market position against such deep-pocketed rivals as Google, IBM and Microsoft.

“We’re investing on behalf of customers and shareholders,” Szkutak said on a conference call with journalists after the results were announced. “It’s impacting short-term results.”

Szkutak separately noted that Amazon’s decision in March to increase the price of its Prime subscription service, by $20 to $99, hasn’t seemed to hurt the company. Szkutak said that the increase in the number of Prime subscribers in the quarter was larger than the increase in the second quarter of 2013.

“We’re really pleased with the Prime program,” Szkutak said. “It’s growing really fast.”

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