Amazon misses analysts’ estimates

Amazon.com, the world’s largest internet retailer, missed analysts’ second-quarter revenue and profit estimates as sales slipped for Kindle Fire devices and the company increased spending on new warehouses.

Net income fell to $7m (€5.7m), or 1 cent a share, from $191m, or 41 cents, a year earlier, the Seattle-based company said.

That missed the 3-cent average analyst estimate compiled by Bloomberg. Sales rose 29% to $12.8bn, compared with the average estimate of $12.9bn.

Chief executive Jeff Bezos is adding fulfillment centres in the US to speed delivery of online purchases. At the same time, planned upgrades to the Kindle Fire may have curbed sales of Amazon’s top-selling product.

The Kindle’s share of the tablet market slipped to 4% in the first quarter, from 17% in Dec, according to IDC.

“When you add on additional capacity so quickly, it takes a little bit of time for that additional volume to run through those fulfillment centres and scale up,” said Mark Harding, an analyst at JMP Securities. “And with rumors of the next Kindle Fire coming out, there’s probably a bit of a pullback.”

Income from operations was $107m in the second quarter, Amazon said. Analysts on average had projected $45m.