Following the bell today, Amazon reported its second quarter financial performance including a $0.27 per share loss on revenue of $19.34 billion. Analysts had expected Amazon to lose $0.15 on revenue of $19.34 billion.
For the quarter, Amazon’s revenue grew 23% when compared to the year-ago quarter. It had operating income of -$17 million, down from its year-ago tally of $79 million.
The company had a net loss of $126 million in the quarter, up many-fold from its $7 million net loss in the year-ago period.
Following its earnings miss, Amazon is down sharply, shedding 5% of its value. In regular trading, Amazon picked up a fraction in a mixed market. Amazon is famously valued for its revenue growth, and not its profits. And its business is cyclical, with stronger fourth quarter revenue than other periods.
Amazon ended the period with cash and equivalents of just over $5 billion.
The company not reveal much regarding its new Fire phone, but did note that since its launch, “the rate of app submissions to the Amazon Appstore has more than doubled.”
Amazon is spending heavily. According to the company, its web-services group, AWS, has hired “thousands of employees in the last year.” That could be a partial explanation for its margin pressure. Amazon now employs 132,000 employees, more than even Microsoft after its purchase of Nokia’s hardware assets.
The company expects revenue of $19.7 billion and $21.5 billion in its third quarter, along with a loss of between $810 million and $410 million, up sharply from its year-ago third quarter loss of $25 million. The company blames “approximately $410 million for stock-based compensation and amortization of intangible assets” for the massive coming deficit.
Amazon’s “services” line item expanded year-over-year from $2.952 billion, to $4.089 billion, a change of 38.52%.
AWS, listed as part of the “Other” category in North America, saw its revenue bucket rise to $1.186 billion. AWS’s revenue, of course, is a fraction of that total tally.
Investors appear bearish on both its past-quarter performance and its guidance. Had Amazon managed to beat on revenue in the period, its surprisingly large per-share loss would have been more palatable.