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Amazon’s losses mount and its shares tank

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Jeff Bezos, Amazon CEOPhotograph by Joe Klamar—AFP/Getty Images

Amazon’s (AMZN) second-quarter sales jumped 23% year-over-year, the company said Thursday, but growing losses have spooked investors, who are pushing the e-retailer’s share price down over 11% in morning trading Friday.

After the close of trading Thursday, the online retailer said it lost $126 million in the second quarter, far more than the $7 million it lost in the same quarter last year. The loss of 27 cents per share was far worse than the 15 cents per share loss analysts had expected, according to data compiled by Bloomberg.

Investors, already impatient with Amazon’s big spending and lack of profits, sent the shares down sharply to $322, erasing nearly $15 billion in shareholder value.

The company reported revenue of $19.34 billion and matching analysts’ expectations. But it was the cost of doing business that stood out. Operating expenses during the quarter rose to $19.36 billion from $15.62 billion the previous year as the company went on a spending spree.

Wall Street analysts predicted that this would be the case, as Amazon has poured money into several new ventures recently, including the company’s entry into the smartphone market with the Fire phone. The company also released its media-streaming player, the Amazon Fire TV, earlier this year and introduced its Prime Music streaming service. Earlier this month, Amazon also unveiled its new $9.99 per month ebook rental service, Kindle Unlimited, as well as its first digital wallet for mobile payments.

In announcing the results, Amazon CEO Jeff Bezos focused on the long list of products and services his company has introduced in recent months. “We continue working hard on making the Amazon customer experience better and better,” Bezos said in a statement.

The company said it expects third-quarter revenue of between $19.7 billion and $21.5 billion, while Wall Street had predicted the company would bring in $20.8 billion. Amazon also expects losses to continue next quarter of between $810 million and $410 million, compared with a $25 million-loss during last year’s third quarter.