Amazon.com Inc on Thursday posted a lower quarterly net profit and thin operating margins that took some of the shine off the world's largest online retailer, sending its shares down 6 percent in after-hours trade.
Amazon, fresh from announcing on Wednesday it would acquire online shoe store Zappos.com for some $928 million, also reported second-quarter revenue that fell just short of Wall Street estimates.
Investors have come to depend on Amazon outpacing a soft e-commerce market, as it has taken market share and continued to launch new categories of goods to sell. But the modest results and strained margins took some of the luster off a retailer that many investors view as overvalued.
It wasn't the blow-out quarter necessarily you've see from them in recent quarters, said McAdams Wright Ragen analyst Dan Geiman, noting that stock had had such a good run in recent weeks.
Positive sentiment on the stock has pushed shares up a whopping 80-plus percent since the start of 2009 -- well in advance of the Nasdaq and outpacing main rival eBay Inc . That gain has led many investors to deem Amazon, despite recent successes in a difficult consumer spending environment, as overly pricey.
Operating margins were 3.4 percent in the quarter, well below the 5 percent seen in the first quarter. At least two analysts had been expecting margins of 4.1 percent or 4.2 percent.
Net profit in the second quarter fell 10 percent to $142 million, or 32 cents per share, from $158 million, or 37 cents per share, a year earlier. That was a penny above the 31 cents expected, on average, by analysts, according to Reuters Estimates.
Operating profit was $159 million, a 27 percent drop, caused by changes in foreign exchange rates and a settlement with Toysrus.com.
Revenue rose 14 percent to $4.65 billion -- shy of the $4.69 billion analyst estimate. Excluding currency fluctuations, revenue rose 20 percent.
Amazon had forecast second-quarter revenue of $4.3 billion to $4.75 billion and an operating profit of $110 million to $190 million.
Looking ahead, Amazon forecast third-quarter revenue of $4.75 billion to $5.25 billion -- compared with the $4.92 billion expected by analysts -- with operating profit between $120 million and $210 million.
Shares fell 6 percent to $88.26 after closing on the Nasdaq at $93.87, up 5.7 percent.
(Reporting by Alexandria Sage; Editing by Steve Orlofsky)