Amazon warns of possible first-quarter loss, stock falls

Thu Jan 30, 2014 6:01pm EST
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SEATTLE (Reuters) - Inc missed Wall Street's profit estimates for the crucial holiday period and cautioned investors about a possible operating loss this quarter, pushing its shares down more than 4 percent on Thursday.

The world's largest Internet retailer, which has spent heavily to forge new markets in cloud computing and digital media, expects operating results for the current quarter to range from a $200 million loss to a $200 million profit, compared with a $181 million profit a year ago.

Amazon has been trying to sustain its red-hot pace of growth by investing heavily in its retail and distribution network across the globe, while expanding into the technology realm with Kindle digital devices, cloud computing services and online media.

That has taken a toll on its bottom line. With revenue growth slowing as Amazon achieves unprecedented scale, analysts said investors may be getting impatient.

"Amazon's gotten so many hall passes on earnings," said Colin Gillis, an analyst at BGC Financial, adding that pressure on the company to produce profit is now rising. "Perhaps the market expectations for them to deliver income, as their revenue growth slows" is increasing, said Gillis.

Executives on Thursday told analysts they were considering an increase in prices for its "Prime" two-day shipping service in the United States, which also includes free video streaming on demand and a book-lending library.

But they had made no final decision on that.


The company posted net income of $239 million, or 51 cents per share, compared with $97 million, or 21 cents per share, in the year-ago quarter. Analysts had expected 66 cents, on average.   Continued...

A zoomed image of a computer screen showing the Amazon logo is seen in Vienna November 26, 2012. REUTERS/Heinz-Peter Bader