Amazon Shares Tumble On Mixed Second Quarter Results

Shares of e-commerce giant Amazon were sinking on Thursday after the company reported mixed results for the second quarter.

While the company exceeded revenue expectations, it did not meet profit forecasts. Shares of the stock went down over 2% in after-hours trading.

For the second quarter, Amazon reported earnings per share of $5.22 while expectations were for $5.57 according to analysts surveyed by Refinitiv.

Revenue at $63.4 billion was ahead of the $62.5 billion that was expected according to Refinitiv. It was also a jump of 20% compared to the year ago period.

Amazon Web Services, the company’s most lucrative business, reported 37% growth. It saw $8.38 billion compared to $8.5 billion expected.

The company also announced an $800 million investment in improving its delivery speed and increased regulatory scrutiny into its business practices.

“Q2′s results were negatively impacted by margin compression in North America due to the investments in next day Prime delivery, which we continue to believe is an example of short-term pain for long-term gain,” remarked Moody’s Amazon Analyst Charlie O’Shea.

“Free one-day delivery is now available to Prime members on more than ten million items, and we’re just getting started,” said CEO Jeff Bezos of the company’s Prime service.

On Amazon’s Prime Day event and one-day shipping program, Bezos said, “Customers are responding to Prime’s move to one-day delivery — we’ve received a lot of positive feedback and seen accelerating sales growth. Free one-day delivery is now available to Prime members on more than ten million items, and we’re just getting started.”

Shares of Amazon have soared 33% so far this year and have outpaced the S&P 500.

Disclaimer: We have no position Amazon.com, Inc. (NASDAQ: AMZN) and have not been compensated for this article.