Amazon reports mixed results in the second quarter

July 26, 2019 | Investopaper

E-commerce giant Amazon has reported weaker earnings in the second quarter of 2019. It could not meet the profit expectations while the revenue growth was more than expected. The revenue increased by 20 percent compared to the year-ago period.

As per the report, EPS of the company stands at $5.22 per share while the company generated revenue of $63.4 billion. The company has not met the expectation of analysts who estimated EPS of $5.57 per share. On the contrary, revenue surpassed the expectations of $62.5 billion. After the release of the report, the stock price of Microsoft dropped by 2 percent in after-hours trading. The company has provided low-profit guidance for the third quarter too.

Amazon is committed to improving its warehouses and delivery infrastructure as part of a plan to make one-day shipping the standard for Prime members by spending $800 million. Analysts do believe that shorter delivery times lead to more purchases. This will induce higher revenue for sure.

Amazon shares have bounced back this year by gaining more than 30 percent taking the valuation over the mark of $1 trillion. The cloud business has helped Amazon to generate around $11.39 billion that has strengthened the revenue of the company.