Amazon Shares Fall After Company Reports 58% Earnings Drop, Cuts Forecasts

[mandy]

Amazon.com Inc. on Tuesday reported a 58% drop in second-quarter profit and cut its earnings outlook for the year because of stepped-up investment in its toy business and lower prices on many products. The company's shares fell 11% in after-hours trading.

Wall Street has fretted over slowing sales growth and falling margins at Seattle-based Amazon, the Web's second-most popular commerce site behind EBay Inc. A discount shipping program, Amazon Prime, has been costly. The company faces intense competition, and spending on technology and content has crimped profits.

Global Crown Capital analyst Martin Pyykkonen said Amazon Prime did not appear to be stimulating sales growth in the way many had hoped. In the year-earlier quarter, sales rose 26%, compared with 22% this quarter, he said...

full article: http://www.latimes.com/business/la-fi-am...s-business

Amazon shares fell to $29.80 in after-hours trading on the Inet electronic brokerage from a close of $33.59 on the Nasdaq...

Looking to the third quarter, Amazon forecast sales of $2.17 billion to $2.33 billion. Analysts, on average, anticipate third-quarter sales of $2.21 billion...

For full-year 2006, Amazon said it expects to record sales of $10.15 billion to $10.65 billion, up from a previous view of between $9.95 billion and $10.50 billion. Wall Street analysts are expecting sales of $10.15 billion,...

full article: http://news.com.com/Amazon+lowers+profit...g=nefd.top

[Anita]

I knew I should be shopping more.  I'll get on that today.