Amazon suffers loss of $126m (€94m) in second-quarter

Amazon's CEO Jeff Bezos is indeed testing the patience of his shareholders and investors as the company has declared that it has suffered a loss of $126m (€94m) in its second-quarter. This comes in when the company's sales have climbed up by 23% to $19.3bn (€14.3bn) and it still remains one of the most highly valued companies in the US.

The reason for the decreased profits is the bad investment decisions made by Mr. Bezos, the co-founder and chief executive of the company, in the areas like cloud computing, warehouses and gadgets such as the new Fire smartphone. Michael Pachter, who is an analyst at Wedbush Securities, had before hand predicted that Amazon would report a quarterly loss. He said, "All of us understand making investments, and then there's a point where investors don't know what the payoff is. What if they get to $200bn (€149bn) in revenue and still don't have profit?"

Until now, shareholders had largely backed Mr. Bezos' big investments' decisions because they felt that Amazon's business opportunity is enormous and so their pay off will increase in the long run. But investors' fears about growing expenses of the company increased, as this year, the company's shares have declined by 10%.

For future too, there is little sign that considerable profits will emerge as Bezos has funneled more money into expanding distribution, grocery delivery services and smartphones and tablets. Amazon itself has issued a forecast for a wider loss in the third quarter.

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