Amazon.com Inc.’s Q2 Revenue Guidance Disappoints Investors (AMZN)
Amazon.com Inc. (NASDAQ: AMZN) reported on Thursday better than expected fiscal first-quarter earnings, thanks to 22% jump in revenue aided by growing digital content and cloud-computing business and strong performance from its core retail division. However, investors were disappointed with the company’s revenue guidance for the second quarter.
Amazon.com, whose bottom line has come under pressure in the recent past as the Company invests for long-term growth of the business, reported that its net income contracted 37% to $82 million or 18 cents a share compared to a profit of $130 million or 28 cents a share, in the same quarter of last fiscal.
The Company is expanding its distribution warehouses across the U.S., working on its new device- Kindle Fire Tablet, and developing its digital content business in order to compete with its rival such as Apple Inc. (NASDAQ: AAPL).
Addressing analysts during earnings call, Amazon.com founder and Chief Executive, Jeff Bezos said, “Amazon Studios is working on a new way to greenlight TV shows. The pilots are out in the open where everyone can have a say.”
“Our customers will determine what goes into full-season production. We hope Amazon Originals can become yet another way for us to create value for Prime members,” added Bezos.
Revenue during the period soared 22% to $16.07 billion from $13.19 billion, in the year-earlier quarter.
Analysts’ consensus estimate was for earnings of 8 cents a share on revenue of $16.15 billion, according to a data compiled by Thomson Reuters.
For the fiscal second quarter, the company expects the bottom line to come between a loss of $340 million to a profit of $10 million. Revenue is expected in the range of $14.5 billion to $16.2 billion while analysts’ estimate was for $15.9 billion.
Shares plunged 3.20% in aftermarket trading hours.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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