amazonstockdropInvestors aren’t too thrilled with Amazon’s most recent quarterly earnings report.

Amazon shares were down more than 11 percent on Friday morning, one day after Amazon saw revenue increase 23 percent to $19 billion in the second quarter, but missed expectations with a quarterly loss of $126 million.

Amazon CEO Jeff Bezos announces the Fire smartphone.
Amazon CEO Jeff Bezos announces the Fire smartphone.

The Seattle online giant warned that losses in the third quarter of 2014 would be even worse at somewhere between $810 million and $410 million, compared to $25 million in third quarter 2013.

The report continued a trend of Amazon posting massive revenue numbers while failing to turn a profit. Despite the operating losses, investors have kept faith in the company for quite some time — now, though, it seems some are a little worried.

Amazon has been spending big money lately on new warehouses across the country and for rights to digital content. It also today opened sales for the new Fire smartphone, which has received somewhat mediocre reviews thus far. Any financial impact from sales of the device won’t be seen until next quarter’s report.

On its earnings call Thursday, Amazon reinforced its philosophy of focusing on long-term profits. It reported that its Prime subscriptions, despite a $20 price increase, are growing year over year.

“We’re very pleased, and we continue to get new subscribers,” CFO Tom Szkutak said on the earnings call.

Amazon shares were trading at $318 as of 8 a.m. PT on Friday.

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  • amzbear

    Nobody realized how much AWS was propping up the whole company’s profits. AWS has been fleecing customers and providing most of Amazon’s profits despite being a tiny share of revenue. Google cut their cloud platform prices by 30-70% in March and AWS was forced to (mostly) match. Google has very publicly said they intend to continue cutting prices in line with Moore’s law…which means more yellow and orange blood in the water to come. Bezos doesn’t care about stock price but his employees sure as hell do and for many of them money is the only thing keeping them at that miserable place.

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