3 Negative Trends in Amazon.com's Earnings Report

Shares of e-commerce and cloud computing giant Amazon.com (NASDAQ: AMZN) dropped following the company's second-quarter report, with strong revenue growth overshadowed by a steep plunge in profits and guidance calling for a possible loss during the third quarter. While revenue soared 25% year over year, net income tumbled 77%.

This isn't the first time Amazon's bottom line has come up short of expectations, so it shouldn't have been a surprise to investors. Amazon is a growth-at-all-costs company, and it's been that way since its founding. Shares have more than tripled over the past three years, with the market applauding Amazon's growth and ignoring the associated price tag.

The only trend that has mattered to the market, except during the occasional post-earnings tantrum, has been revenue growth. But Amazon's second-quarter report exposed three negative trends, beyond a tumbling bottom line, that investors should be aware of.

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Source: Fool.com