Amazon reports profits slump
26/07/2006 - 07:35:33Online shopping company Amazon said earnings plunged nearly 58% as it invested in new technologies and its toy business.
Despite profits dropping to $22m (£18m) in the three months to June 30, sales jumped 22% to $2.14bn (€1.75bn) which the company said was down to providing customers with what they want – such as offering cheap or free shipping deals.
Shares in New York tumbled more than 12% in after-hours trading after Amazon said it planned to invest heavily in its new toy sales strategy and slash prices on many products. It also said operating income for the year would be lower than previous forecasts.
In the UK, Amazon said the launch of Express Delivery – guaranteeing next day delivery before 1pm for products in stock – had given consumers more choice.
