Amazon profits are sharply lower as it invests overseas

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Amazon sales rose in the second quarter but profits plunged, as the e-commerce giant spent heavily in a bid to become the go-to shop globally for everything from food to television.

The Seattle firm earned $197m (£151m) in profit in the three months to the end of June, down 77%.

The fall came as the company pursues expansion overseas and invests in new products and services, including video.

Expenses increased to $37.3bn, up 28% year-on-year.

Amazon is known for ignoring profits and opting to spend on expansion.

The firm in recent months has released new versions of its tablet and home robot, announced plans for warehouses and bricks-and-mortar book stores and announced the release of new movies and television series that it offers through its Prime membership service.

In June the company capped the activity with the announcement that it would buy the Whole Foods supermarket chain for an estimated $13.7bn.

But the spending increase still took investors by surprise. Share prices fell 2% in after-hours trade.

‘Heads down’

Amazon said business remains healthy.

Consumer retail sales in the three months to the end of June climbed 27% in North America and 17% overseas, totalling $34.9bn.

Revenues at its critical web services division, which sells cloud computing services, jumped 42% to $4.1bn.

“Our teams remain heads-down and focused on customers,” said Amazon founder Jeff Bezos.

Earlier on Thursday Mr Bezos briefly became the world’s richest man, overtaking Bill Gates as Amazon’s share price rose.

But he relinquished the title as Amazon’s shares slid lower over the course of the day.

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