Shares in Amazon fell by nearly 7%, or $ 118.38, in afternoon trading on Thursday after the company reported its first two-year revenue loss.
Financial analysts had predicted that the launch of a one-day freight would eat into Amazon's earnings, but even with those warnings, the stock pummeled the stock after the market closed. It didn't help that the company forecasted fourth-quarter revenue – including the all-important holiday season – also looking soft.
The good news for Amazon amidst all the bad news was that the revenue was actually up at the company. For the quarter, Amazon raised $ 70 billion, beating analysts' expectations to $ 68.8 billion.
However, the company reported a profit of $ 2.1
Another potential warning sign for investors was revenues from the company's web services business, which came in at $ 9 billion. Analysts had forecast about $ 9.2 billion from the business area. If competition starts to eat into services (which still grew by a healthy 35% over the past year), it could spell trouble for the company's stock – which has used AWS revenue to bend expenses elsewhere.
has spent many years providing new services. Expanding the one-day free delivery program has cost Amazon more than $ 800 million in the second quarter.
Amazon founder and CEO Jeff Bezos defended the move to a one-day shipment in a statement.
“Customers love the move to Prime from two days to one day – they have already ordered billions of items with free one-day delivery this year. It's a big investment, and it's the right long-term decision for the customers, "Bezos said. "Although the opposite is the case, the fastest delivery rates generate the lowest carbon emissions because these products are shipped from refill centers very close to the customer – it simply becomes impractical to use air or long ground routes."
Looking forward to the holidays Amazon projected net sales of between $ 80 and $ 86.5 billion, with revenues of between $ 1.2 and $ 2.9 billion, versus $ 3.8 billion from a prior year period. Analysts expected to see more revenue within $ 87 billion.