Amazon shares tank after hours following huge $437m losses
SHARES in online giant Amazon fell sharply last night after the retailer announced a $437m loss in the third quarter, much higher than the $41m loss it reported for the same period a year before.
Ten per cent was wiped off the company share price in after-hours trading, following the shock results. The online superstore also warned investors to expect greater than projected losses over the coming three-month period, which will be a difficult pill to swallow for financial backers.
Despite the heavy losses, Amazon announced that net sales were up 20 per cent to $20.58bn during the quarter compared to $17.09bn in 2013.
The company’s bottom line has been hit by a number of high-profile acquisitions and new initiatives, including Amazon’s fresh grocery service in America.
This forced operating expenses to rise to $21.1bn compared to $17.1bn in 2013, and is likely to set alarm bells ringing with investors who are running out of patience.
In a statement yesterday the group listed a number of highlights, including its new Kindle Voyage. Founder and chief executive of the brand Jeff Bezos focused on the holiday period instead of the poor results: “As we get ready for this upcoming holiday season, we are focused on making the customer experience easier and more stress-free than ever. In addition to our already low prices, we will offer more than 15,000 lightning deals.” These deals have proved popular with customers.
In the statement, the company issued a warning to investors, preparing them for more difficult financial results in the coming months.
Amazon, which began trading in 1995, has seen its share price fall by around 20 per cent since the start of this year.
Earlier this week, the online giant announced it is set to hire an additional 13,000 temporary staff over the Christmas period in the UK to cope with increased demand. It comes a week after Amazon announced it will hire a further 1,000 permanent employees in the coming months.