Amazon’s share price slumps on disappointing results
Amazon's shares have sunk in after-hours trading as the company posted a disappointing quarterly profit.
The e-commerce giant's shares were down 6.8 per cent. It said its net income rose to $252m (£207m) from $79m a year before.
But, at 52 cents per share, Amazon's income was less than expected. According to Reuters, analysts' average estimate was 78 cents per share.
The problem stemmed from Amazon's operating costs, which increased 31.5 per cent to $10.94bn. The tech company has been investing in its web services, expanding its Prime offering across the globe. In the UK and abroad, Amazon has be building its network of warehouses and delivery vehicles.
Read more: Is the Amazon Echo actually all that useful? Here's our review
Amazon said it expects sales to come in between $42bn and $45bn for the next quarter – the all-important holiday season.
The company said this month that it will be taking on a small army of 120,000 employees to help it make the most of Christmas, an increase of 20 per cent on last year.
Quarterly revenue rose 29 per cent, which was broadly consistent with expectations. The figures were boosted by Amazon's Prime Day, when it offers deals to consumers.
Net sales increased to $32.71bn, as compared to $25.36bn last year.
Amazon recently launched a voice-controlled bluetooth speaker, Amazon Echo, powered by "Alexa", a system which takes commands on what music to play.
Jeff Bezos, founder and CEO of Amazon, said: “Alexa may be Amazon’s most loved invention yet — literally — with over 250,000 marriage proposals from customers and counting
"And she’s just getting better. Because Alexa’s brain is in the cloud, we can easily and continuously add to her capabilities and make her more useful — wait until you see some of the surprises the team is working on now.”