Amazon surprised investors by delivering a huge miss on its second quarter earnings this evening.
Shares in the US tech giant fell two per cent in after hours trading in the wake of the news.
Revenue for the three months to June was $38bn (£29.1bn) up by a quarter on the same period last year and ahead of analyst expectations compiled by Reuters of $37.2bn.
But Amazon undercooked its bottom line. Earnings per share were 40 cents but analysts were expecting returns of $1.42. Net income fell 77 per cent to $197m from $857m, a year earlier, as it chased revenue growth and invested in a variety of new areas, such as video and new country expansion. Amazon said operating expenses rose 28.2 per cent to $37.3bn.
"Our teams remain heads-down and focused on customers," said Amazon founder Jeff Bezos.
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Amazon, which is in the process of buying upscale grocer Whole Foods Market also plans to create more than 130,000 full-time and part-time jobs by mid-2018 to speed up delivery.
Within its second quarter statement Amazon provided broad guidance on its third quarter forecasts. It expects sales growth of between 20 and 28 per cent with operating numbers between a profit of $300m and a loss of $400m.
The US firm said its guidance “assumes, among other things, that no additional business acquisitions, investments, restructurings, or legal settlements are concluded”.
Earlier in the day Jeff Bezos briefly became the richest person in the world. Amazon shares nosed up as markets opened on Thursday, pushing Bezos net worth ahead of Bill Gates, according to the Bloomberg Billionaires index.
But with shares falling back Bezos remains behind Gates by $1bn after the daily figures were released following the close of US markets.