Greenwood Trading – US e-commerce giant, Amazon, has posted 2nd quarter earnings results that have disappointed investors.
According to Greenwood Trading, E-commerce giant, Amazon, has posted 2nd quarter losses that have missed analysts’ expectations by a wide margin, resulting in a sharp fall in the company’s stock price during fevered after-hours trading.
The online retailer posted a 27 cents a share loss against expectations for a 15 cents a share. Its quarterly sales, however, came in at $19.34 billion which matched forecasts.
“Amazon is widely recognized as a very successful company but the truth of the matter is that it barely makes a profit,” said Paul Iurio, a Greenwood Trading technology researcher.
“Its stock has fallen by 10% this year and we think that’s indicative of investors losing patience with companies that rely mostly upon the potential for fast, long-term growth to justify their valuations while posting little or no actual profit. The time has come to deliver on promises,” he added.
Amazon has invested considerably in its new Fire phone and launched streaming content services as well as building more warehouses in order to be closer to more of its customers and reduce shipping times and this, according to Greenwood Trading, is at the heart of the sharp miss on earnings.
“Like it or not, things could become markedly worse for Amazon going forward. Alibaba Holdings is going public this summer and it’s already announced that it intends to compete in the US rather than just focusing on developing its home market in China and Asia Pacific. Amazon have hinted that the current quarter’s results could miss forecasts too with numbers like $400-800 million in losses doing the rounds,” concluded Iurio.
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