The Seattle-based firm gained $197 million in the three months to the end of June, indicating a dip of 77 percent year-on-year. Amazon expects to reduce up to $400 million in operating profit during the current quarter.
The steep decrease was allegedly caused by Amazon’s rapidly diminished investment into new purchasing categories, including movie, in addition to into global expansion. The company is trying to drive into new markets, including India.
Even the e-commerce giant also revealed new versions of its tablet computer and house robot and declared films and television series.
Last month, in an endeavor to expand into physical shops and the work of meals, Amazon unveiled plans to purchase top US organic food grocer Whole Foods Market for a whopping $13.7 billion.
At exactly the identical time, quarterly revenue grew 25 percent to $38 billion, while analysts expected Amazon to earn $37.2 billion.
Amazon’s shares, that were up 40 per cent this season, fell 3.2 per cent to $1,012.68 in after-hours trading. The merchant had earned 40 cents per share rather than $1.42 as analysts polled by Reuters had expected.
“Q3 is normally a high investment interval. Our movie content spend will keep growing, both sequentially and quarter over quarter,” stated Chief Financial Officer Brian Olsavsky as mentioned by the agency.
— RT (@RT_com) June 16, 2017
The company also introduced $99-a-year Amazon Prime service providing customers with discounted rents and movie and audio streaming. Subscription sales including Prime fees climbed 51 percent in the second quarter to $2.2 billion
“The simple fact that they’re investing on so many fronts right now only speaks to the opportunity that they have before them. We are giving them the benefit of the doubt here because they have implemented so well historically,” stated Josh Olson, an analyst at Edward Jones Investments, as mentioned by Reuters.
For a short time, Amazon chief Jeff Bezos became the world’s richest individual. However, following the Thursday inventory drop, he dropped back into second place behind Microsoft founder Bill Gates
The world’s biggest online retailer Amazon has reported a sharp fall in annual earnings as the firm spent lavishly on extending its services and products worldwide.