Amazon’s third-quarter results are in, and while the company increased revenue, it posted greater-than-expected losses — which sent shares tumbling by almost 10 percent in after-hours trading.
Analysts expected a loss of $0.75 per share, but that ended up closer to a dollar at $0.95 per share, or $437 million.
Analysts also missed on net sales, which came in at $20.58 billion instead of the estimated $20.84 billion.
Business Insider reports Amazon made a lot of investments in Q3: it bought video game streaming service Twitch, launched mobile card reader Local Register, expanded Amazon Prime Fresh and even announced it’d be putting a brick-and-mortar store across from the Empire State Building.
But industry watchers think some of the losses could be coming from the heavy investment in those side projects.
And analysts suggested to CNBC slowing profits are drying up investor patience for Amazon’s super-long growth game. Someone wants to see some returns.
LOU BASANESE, DISRUPTIVE TECH RESEARCH: “This is going to be a tough one to justify saying we’re investing in the future when the loss is that big.”
With the posted losses, a writer at 24/7 Wall Street said, “Jeff Bezos thinks he is running a charity!”
And this headline from TradingFloor.com is pretty self-explanatory.
The good news is that Amazon is large and only getting bigger. Also, the fourth quarter is usually the most profitable for Amazon.
In a prepared statement, CEO Jeff Bezos spoke on the holiday season saying, “We are focused on making the customer experience easier and more stress-free than ever” through deals, products and “curated gift lists.”