Amazon.com Inc's second-quarter income plummeted over the same period a year ago as it cut prices, lost a lawsuit and invested in new technology, the Internet retailer reported on Tuesday.
Amazon net income for the quarter ending June 30 was US$22 million, or US$0.05 a share, as compared with US$52 million, or US$0.12 per share, in its second quarter last year, according to the company.
The results disappointed Wall Street analysts who had anticipated earnings of US$0.07 per share.
In after-hours trading Amazon stock was down more than 14 percent from the previous day at US$29.46 a share. The report was released after the market closed.
Amazon stressed that lower prices and free shipping spurred sales and that Web site memberships doubled this year.
"Our strategy for our business is a straight-forward one," chief executive Jeff Bezos told analysts. "Putting energy into building fly-wheels today that will continue to pay off ten years from now."
Sales grew 22 percent in the second quarter, to US$2.14 billion, compared with US$1.75 billion in the same period last year, according to the Seattle, Washington State, company.
Operating income plunged 55 percent to US$47 million in the second quarter, compared with US$104 million in second quarter of last year, Amazon reported, attributing the decline to technology and content investment, lower prices, free shipping, the Amazon Prime program and the US$20 million cost of a contract termination.
Amazon lost a hard-fought lawsuit to Toys "R" Us, which was allowed to end Amazon's exclusive right to sell its products on the Internet, and allowing Toys to launch its own online store.
Amazon put money into diversifying inventories having merchandise available to fill orders quickly, Bezos said, while analysts worried about slim profit margins in the grocery sector Amazon has targeted.
"We are selecting items in that store that we think will be profitable," Bezos said, indicating a focus on bulk items. "We don't just carry a few flavors of Jello; we offer all 80."
Amazon Prime charges US$79 for a year of two-day order shipping at no extra charge.
"Our investments in technology position us to innovate in seller platforms, web services and digital. We're looking forward to the coming decrease in our year-over-year growth rates in technology spending in the second half of 2006," he said.
INSURRECTION: The NSB said it found evidence the CCP was seeking snipers in Taiwan to target members of the military and foreign organizations in the event of an invasion The number of Chinese spies prosecuted in Taiwan has grown threefold over a four-year period, the National Security Bureau (NSB) said in a report released yesterday. In 2021 and 2022, 16 and 10 spies were prosecuted respectively, but that number grew to 64 last year, it said, adding that the Chinese Communist Party (CCP) was working with gangs in Taiwan to develop a network of armed spies. Spies in Taiwan have on behalf of the CCP used a variety of channels and methods to infiltrate all sectors of the country, and recruited Taiwanese to cooperate in developing organizations and obtaining sensitive information
BREAKTHROUGH: The US is making chips on par in yield and quality with Taiwan, despite people saying that it could not happen, the official said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has begun producing advanced 4-nanometer (nm) chips for US customers in Arizona, US Secretary of Commerce Gina Raimondo said, a milestone in the semiconductor efforts of the administration of US President Joe Biden. In November last year, the commerce department finalized a US$6.6 billion grant to TSMC’s US unit for semiconductor production in Phoenix, Arizona. “For the first time ever in our country’s history, we are making leading edge 4-nanometer chips on American soil, American workers — on par in yield and quality with Taiwan,” Raimondo said, adding that production had begun in recent
Seven hundred and sixty-four foreigners were arrested last year for acting as money mules for criminals, with many entering Taiwan on a tourist visa for all-expenses-paid trips, the Criminal Investigation Bureau (CIB) said on Saturday. Although from Jan. 1 to Dec. 26 last year, 26,478 people were arrested for working as money mules, the bureau said it was particularly concerned about those entering the country as tourists or migrant workers who help criminals and scammers pick up or transfer illegally obtained money. In a report, officials divided the money mules into two groups, the first of which are foreigners, mainly from Malaysia
SILICON VALLEY HUB: The office would showcase Taiwan’s strengths in semiconductors and artificial intelligence, and help Taiwanese start-ups connect with global opportunities Taiwan has established an office in Palo Alto, one of the principal cities of Silicon Valley in California, aimed at helping Taiwanese technology start-ups gain global visibility, the National Development Council said yesterday. The “Startup Island Taiwan Silicon Valley hub” at No. 299 California Avenue is focused on “supporting start-ups and innovators by providing professional consulting, co-working spaces, and community platforms,” the council said in a post on its Web site. The office is the second overseas start-up hub established by the council, after a similar site was set up in Tokyo in September last year. Representatives from Taiwanese start-ups, local businesses and
RSS