Amazon records 77% drop in quarterly profit

Jeff Bezos unseats Bill Gates as world’s richest man as shares touch record high

Amazon said net income fell to $197 million, or 40 cents per share, in the second quarter, from $857 million, or $1.78 per share, a year earlier. Photograph: Mike Segar/Reuters

Amazon said net income fell to $197 million, or 40 cents per share, in the second quarter, from $857 million, or $1.78 per share, a year earlier. Photograph: Mike Segar/Reuters

 

Amazon 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.

The company’s shares, already up nearly 41 per cent this year, were down 2.6 per cent at $1,019 in after-hours trading on Thursday. The shares touched a record high of $1,083.31 in regular trading, helping chief executive Jeff Bezos briefly unseat fellow tech billionaire Bill Gates to become the world’s richest person, according to Forbes.

Amazon said operating expenses rose 28.2 per cent to $37.33 billion in the second quarter which ended June 30th.

The company also forecast an operating income of $300 million to a loss of $400 million for the current quarter. Analysts had expected operating income of $931 million, according to FactSet.

Amazon is known for making bold investments in new business areas even at the expense of profits, a strategy that is often criticised by investors.

The world’s biggest online retailer said net income fell to $197 million, or 40 cents per share, from $857 million, or $1.78 per share, a year earlier. Net sales rose 24.8 per cent to $37.96 billion.

Amazon, which is in the process of buying upscale US grocery chain Whole Foods Market, also plans to create more than 130,000 full-time and part-time jobs by mid-2018 to speed up delivery. Analysts had expected a profit of $1.42 per share and revenue of $37.18 billion. – (Reuters)