Amazon Again Reports Thin Profits — Update

Grazed from WSJ. Author: Alistair Barr and Anna Prior.

Amazon.com Inc. reported another quarter of skimpy profits as the Web-commerce giant spent heavily on shipping, cloud computing and newer initiatives that it hopes will keep revenue growing quickly. Amazon reported net income of $108 million, or 23 cents a share, compared with $82 million, or 18 cents a share, a year earlier. Analysts were expecting a per-share profit of 23 cents, according to Thomson Reuters.

Sales increased 23% to $19.74 billion. Amazon in January had estimated sales would range between $18.2 billion and $19.9 billion. Analysts were expecting $19.43 billion. Operating expenses, meanwhile, rose 23% to $19.6 billion, and the company’s operating margin narrowed to 0.7% from 1.1% a year earlier…

Amazon is spending heavily on its network of shipping warehouses, its cloud-computing offering Amazon Web Services and new hardware such as the Fire TV set top box. That sucks up a lot of the company’s revenue each quarter, leaving slim earnings. However, if analysts and investors see signs of growth from this spending, they usually give Amazon the benefit of the doubt…

Read more from the source @ http://online.wsj.com/article/BT-CO-20140424-716777.html

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