By Tim Maytom
Shares in Amazon dropped 10 per cent in after hours trading after the company disclosed its Q3 financial results, revealing a larger than expected loss.
While revenues did rise 20 per cent year-on-year, with $20.58bn (£12.84bn) taken as sales, up from $17.09bn in 2013, this was slower growth than investors expected, and coupled with large losses, triggered the drop in stock price as shareholders jumped ship.
Operating loss leaped up to $544m in Q3 2014, compared to $25m a year earlier, and led to net losses of $437m, or $0.95 per diluted share. This compares to Q3 2013′s net loss of $41m, or $0.09 per share.
In the earnings call following the disclosure, the company revealed how poorly the Fire Phone had performed, noting they were taking $170m writedown that was “primarily related” to overcommitting on the smartphone, and that $83m worth of Fire Phone inventory was left on the books at the end of Q3.
CEO Jeff Bezos’ statement focused on the upcoming holiday season, where Amazon traditionally sees large surges in revenue, but with the albatross of the Fire Phone still around its neck, Amazon needs to perform especially well to restore investor confidence.
Source:: Mobile App News