AMZN Stock Falls Slightly Following Mixed Q2 Earnings

Amazon is seen at the company logistics centre in Boves

Digging into the numbers, Amazon reported a almost 20 percent increase in revenue during the second quarter compared with a year ago, and the midpoint of the company's guidance implies a similar growth rate for the three months ending in September.

Net sales rose about 20% to $63.40 billion in the second quarter, beating estimates of $62.48 billion.

For the third quarter, Amazon forecast its revenue will be between 66 billion dollars to 70 billion dollars.

One-day shipping. Amazon's retail prowess alone was enough to make AMZN stock an elite performer for many years, but the dual goal of AWS - profit engine and method for funding long-term competitive advantages - has allowed the company to separate itself from the pack. A year earlier, the profit for the same period was about $2.5 billion.

When Amazon delivered second-quarter earnings on Thursday, it was a 180-degree turn from the Amazon that the financial world had seen for the last six months or more.

"We're in the middle of a journey here", Olsavsky said, later adding it would take "multiple quarters to play out". Operating income is expected to be between $2.1 billion and $3.1 billion, compared with $3.7 billion in third quarter 2018.

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Amazon had pledged to spend $800 million in the second quarter to move to one-day delivery from two-day delivery for its Prime members who pay $119 a year.

Amazon - which has expanded from its origins in e-commerce to cloud services, streaming media, artificial intelligence and brick-and-mortar grocery stores - saw shares slip 0.5 percent in after-hours trade on the results, which showed profits below forecasts but better-than-expected revenues. Net income increased to $2.6 billion up from $2.5 billion of net income in the 2nd quarter of 2019. Cloud computing is one of Amazon's most profitable businesses, fueling investments in other parts of the company.

Amazon's investment into one-day shipping for Prime customers cost the company its record-breaking profit streak. Needless to say, the company wants to make it possible for customers to get their products as soon as possible and consequently raise the number of sales the company actually completes in a year. Amazon shares have risen 32% since the beginning of the year, while the Standard & Poor's 500 index has climbed 20%. It was also the biggest event ever for Amazon devices, when comparing two-day periods.

The technical head count at AWS-primarily engineers working on machine learning and other advanced projects-grew twice as fast as the rest of the business.

Meanwhile, Jon Reily, VP, global commerce strategy lead at Publicis Sapient and former head of eCommerce at Amazon, had a more positive outlook: "Analysts are calling this a profit shortfall, or even a "profit wiff", but I instead see it as the company doing what they feel needs to be done and not being too concerned with what Wall Street thinks".

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