ADVERTISEMENT
News » Money
Jul 24, 6:21 PM EDT

Amazon shares fall on deeper-than-expected 2nd-quarter loss

AP Photo
AP Photo/Ross D. Franklin
Technology Video

Latest Earnings News
Baidu reports quarterly profit up 34 percent as revenue from mobile tops 30 percent

Amazon shares fall on deeper-than-expected 2nd-quarter loss

Nokia says Q2 profit up 20 percent, gives upbeat outlook after sale of troubled handset unit

LG Electronics says 2Q profit more than doubled as mobile division ends streak of losses

AT&T profit hurt by cheaper wireless plans; fighting on price with T-Mobile

Latest News
Amazon shares fall on deeper-than-expected 2nd-quarter loss

Review: Amazon Fire phone is an improvement on the familiar

Review: Amazon Fire offers new ways to use phones, needs more outside apps to enable features

Review: New Amazon service offers unlimited e-books, but pricey given limited selection

How Amazon's Kindle Unlimited e-book service compares with rivals Scribd, Oyster

Buy AP Photo Reprints

SEATTLE (AP) -- Shares of Amazon.com Inc. fell Thursday after the e-commerce retailer reported a deeper-than-expected second quarter loss as expenses outpaced a surge in revenue.

Amazon has long focused on spending the money it makes to grow and expand into new areas. In one of its most high-profile moves, Amazon is introducing its own smartphone, the Fire, which starts selling Friday.

The company has been heavily investing in services for its loyalty program, Prime, which costs $99 a year, and includes free two-day shipping on many items. It has added a grocery delivery services and music streaming for Prime Members as well as offering original TV shows and apps. It also expanded Sunday deliveries and recently began offering a set-top video streaming box.

Amazon doesn't disclose how many Prime members there are but it said it added more Prime members in the second quarter than it did in the second quarter last year, despite the fact that it raised the cost for Prime by $20 earlier this year.

Investors are usually accepting of Amazon's thin profit and focus on strong revenue growth. But not this quarter.

The Seattle-based company's shares fell $35.17, or 9.8 percent, to $323.44 in Thursday's aftermarket trading.

Amazon posted a loss of $126 million, or 27 cents per share, compared with $7 million, or 2 cents per share, in the same quarter a year earlier. The average estimate of analysts surveyed by Zacks Investment Research was for a loss of 13 cents per share.

The company said revenue rose 23 percent to $19.34 billion from $15.7 billion in the same quarter a year earlier. Analysts expected $19.33 billion, according to Zacks.

Looking forward, the company expects third-quarter revenue between $19.7 billion and $21.5 billion. Analysts expect $20.81 billion, according to FactSet.

Amazon's results come as the company is in a public squabble with publisher Hachette, reportedly over e-book prices. Amazon did not give an update about the talks.

Amazon shares have dropped 10 percent in 2014, while the Standard & Poor's 500 index has climbed 7.6 percent.

© 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy and Terms of Use.

 
ADVERTISEMENT