Sci-tech

Amazon Sales See Growth In Q2, But Shares Fall

Amazon Sales See Growth In Q2, But Shares Fall”

Amazon forecast an operating income of $US300 million to a loss of $US400 million for the current quarter.

Online retail giant Amazon has announced the financial results for its second quarter, ending 30 June 2017.

Amazon shares fell almost 3% to $1,012 in after-hours trading Thursday.

Amazon told investors to expect Q3 revenues of between $39.25 billion and $41.75 billion. The company had earned US$0.40 per share instead of US$1.42 as analysts had expected, according to Thomson Reuters I/B/E/S.

Amazon.com reported a 77 per cent slump in quarterly profit as the company invests heavily in areas such as video content and in fast-growing economies such as India. CFO Brian Olsavsky said third quarter typically sees lower operating income because it has to prepare for the holiday peak season.

Global sales across Amazon climbed from $9.8 billion to $11.5 billion, while United States sales jumped from $17.7 billion to $22.4 billion. The spectre of Amazon's disruption now hangs over a dizzying array of industries.

Listing the company's achievements in the last few months, he said Amazon had: launched Echo Show, its newest Echo device; introduced calling and messaging via Alexa on all Echo devices; and debuted Inside Edge on Prime Video - the first of 18 Indian Original Series.

Amazon is well known to bulldoze its way into new businesses, whether that's buying a ton of grocery stores for $13.7 billion or running a video streaming service for people playing video games. Analysts had expected US$931mil (RM3.9bil), according to FactSet StreetAccount.

Despite seeing growth in AWS, TechMarketView analyst Kate Hanaghan pointed out that AWS' quarter-on-quarter revenue growth has been shrinking for some time. "G&A up 50 (percent) is insane", referring to general and administrative costs in the second quarter. Costs for fulfillment, marketing and technology all rose.

TechMarketView chief research officer Kate Hanaghan said: "By our calculations the AWS operating margin is also down a bit on Q1, to 22% from 24%".

Compared to the same time previous year, AWS' revenue was up 42 per cent and Amazon's overall service revenues rose 42 per cent to $US13.2 billion. The subsidiary will expand in France, Sweden and China in the near future, Olsavsky said.



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