The party may be over for Amazon.
Amazon’s ( stock is usually tanking after the company posted a lighter profit than Wall Street had hoped for, denting a company in which has seemed liked the item could do no wrong with investors in recent months. , Tech30)
Amazon posted a profit of $252 million for the third quarter, or $0.52 a share, falling short of consensus estimates for earnings of $0.78 per share. Its guidance for earnings within the upcoming quarter also came in below estimates.
in which was enough to send Amazon stock down as much as 7% in after hours trading Thursday.
the item’s a strong about face for the company. Amazon stock has been on fire in recent months with multiple analysts raising their cost targets to $1,000 a share. the item started off the year below $700 a share.
the item may also be a reminder in which investors always want more. For years, Amazon was rarely profitable for long. right now the item has been profitable for six straight quarters — yet apparently not profitable enough.
Jeff Bezos, Amazon’s founder along with CEO, has traditionally focused on reinvesting all (or almost all) profits back into big bets like fulfillment centers, hardware, video streaming along with cloud computing.
Related: Google along with Amazon are in a race to $1,000
When Amazon chooses to turn the knobs slightly down on how much the item reinvests along with posts a slight profit, investors cheer. along with when the item (often) chooses to go into the red, all hell breaks loose.
On a conference call with analysts after the earnings Discharge, Amazon CFO Brian Olsavsky said there was a “step up in investment,” primarily in digital content along with fulfillment centers as well as Echo along with Amazon Web Services.
Amazon’s investment in video content along with related marketing “nearly doubled” compared to the same period a year earlier, according to Olsavsky.
The company is usually also adding 26 fulfillment centers This specific year, compared to 14 last year.
Amazon’s consistent profitability stunning when you consider the costly efforts Amazon is usually undertaking: launching more TV shows, building hardware, investing in brick-along with-mortar stores along with expanding its shipping operations with planes.
Investors have been bullish on Amazon’s position within the growing e-commerce market. There is usually also optimism about its hardware renaissance with Echo along with its fast-growing cloud business, Amazon Web Services.
Bezos is usually fond of talking about the “three pillars” of the company’s business. Those include its e-commerce marketplace, the Prime subscription option along with Amazon Web Services.
During an appearance at the Economic Club of brand-new York on Thursday, Bezos said either the Echo or its TV division “could become a fourth pillar on its own.”
sy88pgw (brand-new York) First published October 27, 2016: 4:30 PM ET