Amazon.com reported a drop in profit for the first quarter as its investment in new businesses ate into earnings, but the online retailer's revenue forecast beat Wall Street forecasts.
For the company's first quarter, which ended March 31, revenue was $9.857 billion, above the average estimate of $9.57 billion and 38.2 percent above a year earlier.
Net income in the fourth quarter was $201 million, or 44 cents per share -- down from $299 million, or 66 cents per share, a year earlier. That was far below the 61 cents expected by Wall Street, according to Thomson Reuters I/B/E/S.
The company posted an 18.2 percent dip in operating profit for the quarter, reflecting the costs of competing in the highly promotional retail environment, with beefed-up investment in its cloud computing services.
But Amazon expects its investments to win market share to pay off. It forecast current-quarter revenue of $8.85 billion to $9.65 billion, above Wall Street expectations of $8.7 billion, according to Thomson Reuters I/B/E/S.
Amazon said it expects operating profit in the current quarter of $95 million to $245 million. In the same quarter last year, Amazon had operating profit of $207 million.
Amazon shares were down about 2 percent following the earnings report, after slipping 1.7 percent, or $3.12 to end at $182.30 in regular-session Nasdaq trading.
(Reporting by Phil Wahba; Editing by Gary Hill)