Amazon.com, Inc. (NASDAQ: AMZN) second quarter earnings were released after the market closed on Thursday, but earnings fell short of estimations.
The company beat revenue estimates, but fell short of earnings as the company only reported an EPS 40 cents compared to the $1.42 estimates by Thomson Reuters.
The earnings caused shares to plummet from an all time high record on Thursday $1,081.61 to $1,012.14 by Friday’s open.
Amazon reported a $37.96 billion revenue as opposed to the $37.18 billion expected, according to Thomson Reuters.
Sales jumped 25% year over year, but the company’s profits fell because Amazon is investing more and more into expanding as well as providing customers the best service.
Net income was $197 million in the second quarter, or $0.40 per diluted share, compared with net income of $857 million, or $1.78 per diluted share in the second quarter, according to the earnings report.
Amazon’s Web Services are still the main factor of the company’s growth.
“Our teams remain heads-down and focused on customers. In the last few months, we launched Echo Show (our newest Echo device with a video screen), introduced calling and messaging via Alexa on all Echo devices, debuted Inside Edge on Prime Video (the first of 18 Indian Original Series), introduced Amazon Channels in both the U.K. and Germany, launched four new Fire tablets, expanded Amazon Fresh to Germany, launched Prime Now in Singapore, launched our 25th airplane with Prime Air, hired more than 30,000 new employees, opened three new Amazon Books stores, launched more than 400 significant AWS features and services, migrated more than 7,000 databases using AWS Database Migration Service, and held our third annual Prime Day — signing up more Prime members than ever before. It’s energizing to invent on behalf of customers, and we continue to see many high-quality opportunities to invest.” Found and CEO of Amazon, Jeff Bezos, stated in the earnings reports, as he also states some highlights.
Amazon CFO Brian Olsavsky says in third quarter Amazon will invest even more into expanding the company.
With all the services Amazon offers, such Amazon Books, Amazon Fresh, Amazon Business, and even its deal to acquire Whole Foods, the company is now looking into even more services such as health and pharmaceutical, according to CNBC.
Amazon states in the earnings report for its third quarter guidance. The company expects net sales to be between $39.25 billion and $41.75 billion, or to grow between 20% and 28% compared with third quarter 2016. This guidance anticipates an unfavorable impact of approximately $125 million or 40 basis points from foreign exchange rates.
And operating income (loss) is expected to be between $(400) million and $300 million, compared with $575 million in third quarter 2016.
As earnings report approached, CEO Jeff Bezos, became the richest person in the world on Thursday
Investors can expect Amazon to keep growing even more, as the company has grown at a rapid pace in the past few years now. The company will be investing more into the growth and international expansion to offer its services to customers globally.