July 24, 2014 Last Updated 8:11 am

Amazon stock down sharply in after hours trading after disappointing earnings report

Net sales climb 23 percent to $19.34 billion, but the net losses climb to $126 million in Q2

The online retailer Amazon.com today reported its Q2 earning after the bell and the results immediately sent its stock price falling over 8 percent almost 10 percent. (You can track Amazon’s stock here, because every time I type a new share price, the collapse only gets worse.)

Amazon was able to report that net sales increased 23 percent, both in line with expectations and impressive. But the company reported net loss of $126 million in Q2 compared to a loss of $7 million a year ago. Worse, Amazon expects huge losses in Q3 saying that the company expect operating losses to be between $410 and $810 million next quarter.

In the past, investors let CEO Jeff Bezos get away with investing heavily in the business, even at the cost of profits, but those days seem to be ending as the company’s losses are now, once again, growing. Amazon is very vague when it comes to breaking out its sales, something that is a bit of an advantage when things are going well; less so when people are disappointed by the earnings report.

Analysts do not doubt that Amazon knows how to grow sales – they drop prices and under price its own products – but the thought was always that somewhere down the road investors would be rewarded. Now, after looking at the results posted by Facebook, they are beginning to wonder if they backed the wrong horse.

Amazon-Q2-2014-earnings

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