Amazon shares sink as profits fall 77pc

Amazon’s quarterly profit slumped 77pc after it stepped up spending in the three-month period to boost its international presence and invested heavily in video content. 

Net sales rose 25pc to $38bn (£29bn) in the second quarter of 2017, up from the $30.4bn posted a year earlier, but operating expenses came in 28pc higher at $37bn, as Amazon said it continued to see “many high-quality opportunities to invest”.

In the last few months, Amazon said it had expanded a number of its services to new markets, including its Amazon Fresh grocery delivery service to Germany, its TV on-demand Amazon Channels subscriptions in the UK and its two-hour delivery Prime Now service in Singapore.

Amazon said its loss widened to $724m from $135m year on year in its international unit.

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Net income for the group as a whole fell to $197m, or 40 US cents per share, down from $857m, or $1.78 per share, a year earlier, and missing analyst expectations for $1.42 a share. 

Amazon said it expects to generate anywhere between an operating loss of $400m and income of $300m in the third quarter of 2017. A year earlier, its operating income stood at $575m for the third quarter. 

However, it said net sales should come in between $39.25bn to $41.75bn in the three months to the end of September. 

Its biggest earner continues to be its cloud computing division, Amazon Web Services, where net income grew to $914m in the three months to June 30 from $718m a year earlier. 

Shares in Amazon fell as much as 4pc in after-hours trade on the update, having started their decline earlier in the day. 

Boss Jeff Bezos temporarily became the world’s richest person, leapfrogging Bill Gates, earlier on Thursday after shares surged ahead of its earnings report. 

Bezos, the fourth richest person at the beginning of the year, overtook Microsoft co-founder Gates as Amazon shares rose 1.8pc to $1,071 (£820). 

However, shares started falling as the day progressed and closed down 0.7pc at…

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