Amazon has reported that its April to June quarter included a 22% revenue rise over the same period a year ago–up to $15.7 billion from $12.83 billion. But the profits took a serious tumble to a reported loss of $7 million, or 2 cents per share. That’s a 200% drop from last year’s $7 million profits. While the revenue figures were roughly in line with what analysts had been expecting, the loss was a serious flop for Amazon, given that the market was predicting earnings of about 5 cents per share.
The loss is due to Amazon’s spending habits, of course. The company explained that it was spending to ensure it could fulfill orders and to secure digital content rights so it has material to serve up to customers of its streaming music and TV services.
The market, long used to Amazon reporting very slim profits on billions in revenue, reacted with a quick slump in the share price of about 2%. The previous quarter told a similar, if less dramatic story. In the U.K., Amazon recently moved to cut some of its internal costs by scrapping free delivery on some purchases under £10.