Amazon Q2 Profit Drops - Update

(RTTNews) - Amazon.com Inc. (AMZN) Thursday reported a second-quarter profit that dropped from a year ago, driven largely by increase in operating costs. Shares of the online retailer dropped nearly 3 percent in extended session.

Seattle, Washington-based Amazon reported second-quarter profit of $197 million or $0.40 per share, down from $857 million or $1.78 per share last year. Analysts polled by Thomson Reuters expected earnings of $1.42 per share for the quarter.

Amazon's sales for the quarter rose 25 percent to $37.96 billion from $30.40 billion a year ago. Analysts had a consensus revenue estimate of $37.18 billion for the quarter.

Sales from North America jumped 27 percent to $22.37 billion from $17.67 billion last year, while international sales rose 17 percent to $11.49 billion.

Meanwhile, revenues of Amazon Web Services, Amazon's cloud service division, surged 42 percent to $4.1 billion.

Total operating expenses for the quarter rose to $37.33 billion from $29.12 billion last year. Amazon's operating costs continues rise as the company spends heavily on its online infrastructure and other projects. Investors have been somewhat tolerant of its losses as Amazon is perceived to be using its cash to prop up long-term growth.

Looking forward to the third quarter, the company expects sales of $39.25 billion to $41.75 billion. Analysts currently estimate revenues of $39.93 billion.

AMZN closed Thursday's trading at $1,046, down $6.80 or 0.65%, on the Nasdaq. The stock further slipped $22.45 or 2.15% in the after-hours trade.