Amazon recorded it largest ever quarterly profit over the holiday quarter but missed Wall Street’s estimates by a wide margin, sending its share price into a tailspin.
Shares in the world’s largest online retailer plunged 12% on Thursday after it announced a net profit of $482m for the three months ending 31 December – up from $214m a year earlier. The company notched up $35.75bn in sales in last year’s final three months.
It was the first time Amazon has reported three consecutive profitable quarters since 2012, but the gain was less than analysts had been expecting. Analysts, however, were expecting $36bn in sales and net income of $754m.
Net sales from its cloud business, Amazon Web Services, rose 69.4% to $2.41bn, compared with a growth of more than 78% in the third quarter.
Amazon has been spending on rolling out several new services for members of its $99-a-year Prime loyalty program, including one-hour delivery and original TV programming, to attract customers in a highly competitive online shopping market.
Amazon dominates the worldwide retail e-commerce market, which according to eMarketer totaled $1.67tn last year and is expected to grow by 22% this year.
Amazon’s Prime program is estimated by some analysts to have around 50 million members worldwide. In a decade since its launch, Prime has become an engine of growth for Amazon and an important testing ground for new offerings like one-hour delivery and ambitious original TV programming.
Reuters contributed to this story.
