Amazon down after 73% drop in quarterly profit

Don’t turn the page!

Amazon shares tanked in after-hours trading Tuesday evening. The world's largest Internet retailer reported a 73% drop in quarterly profit, to $63 million, or $0.14 a share, after spending heavily on its new tablet computer and other long-term projects. Revenue jumped 44% to $10.88 billion, but still came in short of expectations. Wall Street was expecting quarterly EPS of $0.24 on revenue of $10.95 billion.

Looking ahead, Amazon said it expects between an operating loss of $200 million and a profit of $250 million for the fourth quarter with sales seen ranging $16.45-18.65 billion. The consensus view was for sales of $18.15 billion in the December-ending period, and a profit of $0.85 a share, which is based on a net income estimate of around $394 million.

Amazon CEO Jeff Bezos chose to focus on demand for the company's new Kindle Fire tablet product, rather than the shortfall. Bezos stated, "September 28th was the biggest order day ever for Kindle, even bigger than previous holiday peak days – we introduced Kindle Fire for $199, Kindle Touch 3G for $149, Kindle Touch for $99, and our all new Kindle for only $79." He added, "In the three weeks since launch, orders for electronic ink Kindles are double the previous launch. And based on what we're seeing with Kindle Fire pre-orders, we're increasing capacity and building millions more than we'd already planned."

Amazon.com (AMZN : NASDAQ : US$227.15), Net Change: -10.46, % Change: -4.40%, Volume: 9,912,217

Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

For disclosures of any equities mentioned here please see: http://www.canaccordgenuity.com/en/ODD/pages/disclosures.aspx

About the Author

Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

For disclosures of any equities mentioned here please see: http://www.canaccordgenuity.com/en/ODD/pages/disclosures.aspx.

Comments
comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome