Amazon reported a worse-than-expected loss in the second quarter, sending shares down more than
five 10 percent in after-hours trading today.
The company, which launched its first smartphone, the Amazon Fire phone, a few weeks ago, posted a loss of 27 cents per share on revenue of $19.34 billion in the second quarter. Analysts had been expecting on average a loss of 15 cents per share on $19.34 billion in revenue.
Looking ahead, Amazon said it expected net sales to reach between $19.7 billion and $21.5 billion in the current quarter. Wall Street expected $20.83 billion in revenue. Amazon also expects an operating loss of $810 million to $410 million.
We’re looking to hear more details from the press and analyst conference calls on Amazon’s surprise in the second quarter.
Update 4:52 pm ET: On a call with reporters, Amazon CFO Tom Szkutak reiterated that the company is interested more in investing in opportunities such as the buildout of its Amazon Web Services data storage service than it is in turning a profit in the near term. Wall Street has mostly given Amazon the luxury of doing so in recent quarters.
“We have a long-term view,” Szkutak said. “We’re not trying to optimize for short term profits.”
On the topic of AWS, Szkutak said revenue growth was hampered somewhat by the price cuts Amazon has been handing out across the service to grab more market share. Still, Szkutak said Amazon was “extremely pleased” by usage growth of around 90 percent among its AWS customers.
Amazon doesn’t break out results for AWS; it is included in the “Other” revenue line item, which also includes advertising revenue. Revenue growth in the “Other” category decelerated from 60 percent in the first quarter to 38 percent in the second quarter.
Other big areas of investment highlighted on a call with analysts: opening more fulfillment centers; hiring in AWS; and a “significant” bump in spending on Amazon’s video business. The company said it will spend more than $100 million in the third quarter alone on its original programming in its video business.
This article originally appeared on Recode.net.