Amazon Stock Sinks on Disappointing Earnings
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E-commerce giant Amazon's profit in the holiday quarter missed analysts' estimates by a wide margin as operating expenses rose and growth slowed in its cloud services business.
Shares of the world's biggest online retailer plunged nearly 15% to $542 in extended trading on Thursday.
The company's total operating expenses surged more than 20% to $34.64 billion in the fourth quarter.
Amazon has been spending on rolling out several new services for members of its $99-a-year Prime loyalty program, including one-hour delivery and original TV programming, to attract customers in a highly competitive online shopping market.
Net sales from its cloud services business, Amazon Web Services, rose 69.4% to $2.41 billion, compared with a growth of more than 78%in the third quarter.
Amazon's net sales in North America increased 24% to $21.5 billion.
Net profit rose to $482 million, or $1.00 per share, in the quarter ended Dec. 31 from $214 million, or 45 cents per share, a year earlier.
Analysts on average had expected a profit of $1.56 per share, according to Thomson Reuters I/B/E/S.
Net sales rose 21.8% to $35.75 billion, but missed analysts' expectations of $35.93 billion.