Amazon Stock Tumbles on Losses

As it turns out, even Amazon has to turn a strong profit.

Investors reacted strongly to Amazon’s larger than expected Q2 2014 loss of $126 million. The company also indicated that its time in the red is not over yet, and projects operating losses in the current period of as much $810 million.  Amazon saw its stock tank on these less than cheerful projections, falling as much as 10.2 percent in late trading.  That fall accompanies an approximately 10 percent annual drop.

Primary among investors’ concerns is a worry that Amazon is simply pursuing too many different projects at once and is being stretched too thin.  In 2014 alone Amazon has rolled out unlimited e-book rental, hand-held grocery ordering, a new smartphone, set-top box and expanded same-day delivery.  Amazon also continues to pursue even faster delivery by widening its warehouse footprint.

Amazon’s sales rose 23 percent to $19.34 billion in the quarter, but that essentially just about equaled out the 24 percent increase in spending during the same period.

“We’re not trying to optimize for short-term profit,” Amazon financial head Tom Szkutak insisted in a call Thursday with investors, reports The Wall Street Journal.

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