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Amazon Q2 income dives, taking stock price with it
San Francisco (AFP) Jul 25, 2006 Amazon net income for the quarter ending June 30 was 22 million dollars, or five cents a share, as compared with 52 million dollars, or 12 cents per share, in its second quarter last year, according to the company. The results disappointed Wall Street analysts who had anticipated earnings of seven cents per share. In after-hours trading Amazon stock was down more than 14 percent from the previous day at 29.46 dollars a share. The report was released after the market closed. Amazon stressed that lower prices and free shipping spurred sales and that website memberships doubled this year. "Our strategy for our business is a straight-forward one," chief executive Jeff Bezos told analysts. "Putting energy into building fly-wheels today that will continue to pay off ten years from now." Sales grew 22 percent in the second quarter, to 2.14 billion dollars, compared with 1.75 billion dollars in the same period in 2005, according to the Seattle, Washington, company. Operating income plunged 55 percent to 47 million dollars in the second quarter, compared with 104 million in second quarter 2005, Amazon reported, attributing the decline to technology and content investment, lower prices, free shipping, the Amazon Prime program and the 20 million dollars cost of a contract termination. Amazon lost a hard-fought lawsuit to Toys "R" Us, which was allowed to end Amazon's exclusive right to sell its products on the Internet, and allowing Toys to launch its own online store. Amazon put money into diversifying inventories having merchandise available to fill orders quickly, Bezos said, while analysts worried about slim profit margins in the grocery sector Amazon has targeted. "We are selecting items in that store that we think will be profitable," Bezos said, indicating a focus on bulk items. "We don't just carry a few flavors of Jello; we offer all eighty." Amazon Prime charges 79 dollars for a year of two-day order shipping at no extra charge. "Our investments in technology position us to innovate in seller platforms, web services and digital. We're looking forward to the coming decrease in our year-over-year growth rates in technology spending in the second half of 2006," he said. Community Email This Article Comment On This Article Related Links All about the technology of space and more
Taiwan AU Optronics posts sharp fall in profits in second quarter
Taipei (AFP) Jul 25, 2006 AU Optronics Corp, the world's third biggest flat-panel maker, posted Tuesday a sharp fall in net profits in the three months to June as competition kept the pressure on prices. |
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