Amazon sits on slippery slope as investors pull out from company
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Amazon lost over $16 billion in value on the night of July 26, a sign that investors were growing weary of the retail giant's repeated failures to make a consistent profit.
LOS ANGELES, CA (Catholic Online) - This was Amazon's largest quarterly loss in two years, as investors were not happy with the company's decision to invest in smartphones, warehouses and hi-tech electronic devices.
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Amazon reported a net loss of $126 million, or 27 cents per share in the quarter that ended on June 30, compared with a loss of $7 million, or two cents a share during the same time in 2013.
"We have a tremendous amount of opportunity," said chief financial officer Tom Szkutak. "While it's impacting short-term results, we'll obviously be looking to get great returns on invested capital."
The recent trend is likely to continue into the third quarter of 2014, after Amazon warned it expected operating losses of $810m to $410m.
"As long as there is money to pour into the business, [Amazon] will be pouring money into the business," said Sucharita Mulpuru, an analyst at Forrester Research. "If you can spend down all your profit and nobody is going to penalize you for it, why show a profit?"
For the first three months of 2014, it was a different story, with Amazon making a profit of $108 million.
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