Amazon share price slides after weaker-than-expected Q2 earnings
Amazon failed to meet profit expectations in its second quarter, with investors reflecting their disappointment by sending its share price lower, though investment was rewarded by impressive sales growth.
Amazon’s second quarter (Q2) results were a mixed bag due to its aggressive growth strategy that saw it sacrifice profit for revenue growth.
The e-commerce giant failed to meet its profit forecasts this quarter, but exceeded expectations in terms of revenue, driving sales growth at the expense of lower profit margins.
‘Customers are responding to Prime’s move to one-day delivery — we’ve received a lot of positive feedback and seen accelerating sales growth,’ Amazon founder and CEO Jeff Bezos said.
‘Free one-day delivery is now available to Prime members on more than ten million items, and we’re just getting started.’
Amazon results: key figures
Amazon saw its earnings per share (EPS) hit $5.22, falling short of the $5.57 that analysts surveyed by Refinitiv expected.
However, the company edged above analysts’ expectations in terms of revenue, hitting $63.4 billion, with forecasters expecting sales of $62.5 billion.
‘Q2′s results were negatively impacted by margin compression in North America due to the investments in next day Prime delivery, which we continue to believe is an example of short-term pain for long-term gain,’ Moody’s Amazon Analyst Charlie O’Shea said in an email statement.
Amazon share price slides after Q3 outlook disappoints
Amazon saw it share price tumble a little more than 2% in after-hours trading after the company offered a disappointing Q3 outlook that dipped below analysts estimates.
Its stock closed on Thursday at $1,973 after falling $26 in the wake of its Q2 results.
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