Addurl.nu Onblogspot News: Amazon's Profit Down As Spending Outpaces Sales Growth

Tuesday, July 26, 2011

Amazon's Profit Down As Spending Outpaces Sales Growth

Markets sagged Tuesday as lawmakers in Washington continue to argue over resolution to the debt ceiling. Republican leaders continue to push for a temporary plan while President Obama is threatening to veto any legislation that doesn't provide a long-term solution to the debt ceiling. Stocks held in for most of the day, but sold off hardest in the last hour and a half of trading. While there has been some weakness, investors are mostly acting as if a deal is an inevitability.

After the close, Amazon.com Inc. (AMZN) became the next of the tech leaders to report earnings, and they didn't disappoint. AMZN reported EPS of $0.41 vs $0.35 per share and revenues of $9.91B vs. $9.37B estimated, and the stock is surging higher after hours (currently about 6%). While the jobs picture remains bleak in the US, corporate earnings, especially from leading companies, continue to impress.

(Updates to include more detail on quarter, comments from media call. Includes analyst comment.) 

--Amazon profits fall as operating expenses rise 54%.
--Amazon has 15 fulfillment centers, expects more by year end.

Amazon.com Inc.'s (AMZN) second-quarter earnings dropped 7.7% as the Internet's No. 1 retailer by sales continued spending at a rate that outpaced even its heady revenue growth. 

But the decline in profit wasn't as steep as feared, and took a back seat for investors to 51% sales growth. Shares were up 6.5%, at $228.15 after hours...

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