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Amazon stock takes a tumble after rare earnings disappointment

Amazon stock takes a tumble after rare earnings disappointment
[Photo: Flickr user Seattle City Council]

The money is still rolling in at Amazon.com Inc., but the payoff wasn’t quite as hearty as some had hoped this time around.

The Seattle e-commerce giant reported mixed second-quarter earnings this afternoon, causing its share price to ricochet in after-hours trading. Earnings per share were $5.22 on revenue of $63.4 billion. Analysts were expecting EPS of $5.57 on revenue of $62.5 billion, according to consensus estimates cited by CNBC.

Revenue from Amazon’s all-important AWS unit was also a miss: $8.38 billion versus an expected $8.5 billion.

Amazon shares were down about 1.35% after the bell.

Three months ago, Amazon said it would spend up to $800 million to bring one-day shipping to Prime, an ambitious announcement that left many wondering if the results would be worth the investment. The second quarter doesn’t include Amazon’s ubiquitous Prime Day event, which took place earlier this month, so we’ll have to wait a little longer to see whether sales for that event matched the hype. Amazon is still growing rapidly however you slice it, with net sales up 20% compared to the same period last year.

Amazon said last week that Prime members bought more than 175 million items during the online sales extravaganza. In a statement, CEO Jeff Bezos indicated that the company is all in on speedier delivery. “Free one-day delivery is now available to Prime members on more than ten million items, and we’re just getting started,” he said.

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