Amazon’s loss in revenue was seen clearly during the recent declaration of the company’s second quarter earnings.
The e-commerce giant is known for having increased sales for a quarter prior this year, but expectations seemed to overleaped the expected losses (9.5% downtrend in stocks). In figures, Amazon had a loss of $126 million despite its staggering $19.34 billion revenue. As expected, the chief executive officer of Amazon did not emphasize the company’s loss. Instead, he mentioned the company’s commitment to provide better experience to customers. In after-hours trading of Amazon, its shares tumbled to $322.50 (10% downtrend). What’s worse is, there is a forbidding upcoming quarter forecast of $810 million for the company, which is way higher than its third quarter loss in 2013 ($25 million).
In the same period last year, Amazon only loss two cents a share ($7 million net loss), yet now there has been a greater loss of 15 cents per share. Amazon also drowned in operating expenses, reaching up to $19.36 billion.
The not so impressive company’s stock prices were recorded as well (a fall of more than 7% in the last six months and 9.5% decline in after-hours trading). The Amazon net sales may have increased by 23% ($19.34 billion) and fell between the company’s approximations ($18.1 billion and $19.8 billion), but this is not a sure sign of good company performance. Bezos obviously kept his head high and acted not aware of the poor share records of the company. He was simply followed by Amazon Chief Financial Officer Tom Szkutak handling the conference residual hours.
The blame for Amazon is directed to the company’s Prime program (two-day free shipments to customers for a value of $99 purchases a year). It clearly shows that the company is overly compensating for the orders’ shipping. Though big names like Google, Facebook, and Apple are known for their innovations and fast-pace developments, the losses they encounter are not anything like Amazon’s.
Though downtrend in share prices is included in the loss of revenue of Amazon, the company’s moneymaking web services may call for the organization’s continuous expansion. Amazon web services usage is recorded to be near 90% year-over-year for the concerned quarter. The next quarter may also boost net sales growth (15% to 26% increase compared last year). As expected, following the net sales increase will be partnered with operating losses. Amazon is showing survival procedures by introducing new ventures, including its e-book subscription service and expansion of smartphone retailing.