From Amazon Investor Relations:
Amazon.com, Inc. today announced financial results for its second quarter ended June 30, 2017.
Operating cash flow increased 37% to $17.9 billion for the trailing twelve months, compared with $13.0 billion for the trailing twelve months ended June 30, 2016. Free cash flow increased to $9.7 billion for the trailing twelve months, compared with $7.7 billion for the trailing twelve months ended June 30, 2016.
. . . .
Net sales increased 25% to $38.0 billion in the second quarter, compared with $30.4 billion in second quarter 2016. Excluding the $502 millionunfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 26% compared with second quarter 2016.
Operating income decreased 51% to $628 million in the second quarter, compared with operating income of $1.3 billion in second quarter 2016.
Net income was $197 million in the second quarter, or $0.40 per diluted share, compared with net income of $857 million, or $1.78 per diluted share, in second quarter 2016.
Link to the rest at Amazon Investor Relations
Here are some excerpts from the Wall Street Journal’s first article after the announcement:
Amazon’s performance contrasts with many traditional U.S. retailers, which are struggling with declining foot traffic and the shift of consumer spending online. At a time when Amazon is investing heavily and expanding, other retailers are saddled with high debt loads and falling sales, forcing them to close stores and cut jobs—and extending Amazon’s advantage.
Amazon’s strong quarterly sales growth—a feat it repeats every quarter—reflects how the online retail giant keeps broadening the categories it operates in. In recent weeks, it has become an official seller for Nike Inc. and Sears Holding Corp.’s Kenmore brand of appliances.
Amazon.com Inc.’s revenue rose 25% in the second quarter, bucking the retail industry’s slump with its dominance of online shopping.
However, Amazon said Thursday that profits fell 77% as Amazon spent heavily to expand. Profits were $197 million, or 40 cents, down from $857 million, or $1.78 per share, a year earlier. Analysts surveyed by Thomson Reuters expected adjusted earnings of $1.42 per share.
. . . .
Shares of the company fell 1.2% in after-hours trading after finishing $1,046 on Thursday. Shares were up about 39% year-to-date after the close.
. . . .
Amazon’s performance contrasts with many traditional U.S. retailers, which are struggling with declining foot traffic and the shift of consumer spending online. At a time when Amazon is investing heavily and expanding, other retailers are saddled with high debt loads and falling sales, forcing them to close stores and cut jobs—and extending Amazon’s advantage.
Amazon’s strong quarterly sales growth—a feat it repeats every quarter—reflects how the online retail giant keeps broadening the categories it operates in. In recent weeks, it has become an official seller for Nike Inc. and Sears Holding Corp.’s Kenmore brand of appliances.
. . . .
Amazon’s ever-increasing clout is accompanied by a new phase of heightened investment, after several quarters of spending discipline. The retailer is plowing profits back into product development, warehouse building and delivery infrastructure, as well as overseas expansion and video content.
. . . .
It said on Wednesday it plans to host a giant job fair next week to hire for its 50,000 current U.S. warehouse openings, part of its pledge to hire 130,000 U.S. workers through mid-2018. Amazon said Thursday that its global workforce rose by more than 31,000 in the second quarter to 382,400.
Link to the rest at Wall Street Journal
Yes. Now tell people the common financial reasons why, and why it’s temporary. Don’t just spew out clickbait crap like that.
Because:
“However, Amazon said Thursday that profits fell 77% as Amazon spent heavily to expand. Profits were $197 million, or 40 cents, down from $857 million, or $1.78 per share, a year earlier. Analysts surveyed by Thomson Reuters expected adjusted earnings of $1.42 per share.”
Which is totally because:
“The retailer is plowing profits back into product development, warehouse building and delivery infrastructure, as well as overseas expansion and video content.”
It used to be common for businesses to reinvest profit in expanding the business rather than making stockholders rich. Might there be a connection between this philosophy and increasing sales and market share? (Rhetorical question)
Some people don’t understand that an investment can grow even if a company doesn’t make a profit. Assets – Liabilities = Income – Expenses + Capital.
The stock is getting killed in after-hours trading.