NEW YORK (Reuters)-Amazon.com, reported a decline in profit over the first quarter as its investment in new businesses in profit ate, but the online retailer revenue forecast beat Wall Street expectations.
The company forecast revenue for the current quarter that would beat Wall Street estimates and profit margins were in line with the expectations of the company, help lifting her shares in after hours trading.
"The concern that people had, that they were going to spend more than the street had expected, happened," said Ken Sena, an analyst at Evercore Partners. "But if you look at the nature of the acceleration of growth are displayed on the top line and almost all Street expectations, I think that's clearly what they're doing makes sense."
The company is willing to sacrifice some profitability to gain customers and to build new businesses. It has invested heavily in areas such as "cloud computing"--which allows companies to store their data on its servers--to take on his rivals Google Inc. and Apple Inc.
Amazon is also money to open new distribution centers and cement his lead als's to organize world's largest online retailer.
For the first quarter of the company, which ended on 31 March, revenue was $ 9857 billion, above the average estimate of 9.57 billion dollars and 38.2% above a year earlier.
The net profit in the fourth quarter decreased $ 201 million, or 44 cents per share--from 299 million, or 66 cents per share, a year earlier. That was far below the 61 cents expected by Wall Street, according to Thomson Reuters I/B/E/S.
The company posted an 18.2 percent dip in operating profit for the quarter, by calculation of the cost of competing in the highly promotional retail environment, with strengthening investments in cloud computing services.
Operating margin, that Amazon has said is the best gauge of profitability given the variety of articles that it sells, came to 3.3 percent, in the middle of the range that it had predicted.
But Amazon expects its invest to win market share will pay off. The forecast current quarter revenue of $ 8.85 billion to 9,65 billion dollars, above Wall Street expectations of $ 8.7 billion, according to Thomson Reuters I/B/E/S.
Amazon said it expects operating profit in the current quarter from $ 95 million to $ 245 million. Amazon had operating profit of $ 207 million in the same quarter last year.
Amazon shares were almost flat after the earnings report, 1.7 percent, or $ 3.12, slipping on ends at $ 182.30 in the regular session Nasdaq trading.
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