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Amazon's finances fluctuates

Jul 26 2013 21:15 Reuters

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San Francisco - Amazon's forecast disappointing income and revenue as it grapples with a weaker international market, overshadowing improving profitability and economic conditions in the United States.

Amazon and other multinational corporations are being pressured by a declining European economy that is sapping consumer spending across the region.

While North American net sales jumped 30% in the latest second quarter, its international segment barely broke even with revenue rising 13%.

Scott Tilghman, an analyst with B Riley & Co, said: "International sales were far weaker than expected and that plays into the guidance.

"We're seeing weakness on the international side that the domestic business isn't able to make up."

"The European consumer has been weak.

"It's a tremendous opportunity for Amazon as international margins have been constrained. 

"If they can get to 5% profit margins or more, that's tremendous operating leverage, but you need the macro environment to be better."

Amazon shares fell 2.1% to $297 in after-hours trade.

Technology

After the bell on Thursday, the company reported a second-quarter net loss of $7m, or 2c a share, compared to a profit of $7m or a penny a share a year earlier.

Revenue in the latest quarter was $15.7bn.

The largest internet retailer had been expected to earn 5c a share on $15.73bn in revenue in the latest quarter, according to Thomson Reuters I/B/E/S.

Amazon also issued a cautious third-quarter outlook.

It forecast revenue of $15.45bn to $17.15bn and operating results ranging from a loss of $100m to a profit of $275m.

Wall Street was looking for third quarter revenue of $17bn and operating profit of $390m.

Amazon is trying to turn itself from an online retailer into a broader technology company offering consumer gadgets like tablets and cloud computing services to corporations and governments. It is doing this while expanding in competitive overseas markets such as China.


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