July 25, 2012
Amazon(AMZN) shocked investors Thursday night, reporting a net loss even though revenue increased. During the same quarter last year, the company reported earnings of $7 million. This quarter, the company lost $7 million. Overall, revenue rose over 20% to $15.7 billion, which just missed average expectations by $30 million. Amazon has generally had a low profit margin, with the number often dropping into negative territory. This was not helped by the fact that the company’s operating expenses rose 23%, mirroring its revenue growth to an astounding $15.63 billion. The weak earnings may have been due to rising costs in technology and online streaming.
Amazon(AMZN) shocked investors Thursday night, reporting a net loss even though revenue increased. During the same quarter last year, the company reported earnings of $7 million. This quarter, the company lost $7 million. Overall, revenue rose over 20% to $15.7 billion, which just missed average expectations by $30 million. Amazon has generally had a low profit margin, with the number often dropping into negative territory. This was not helped by the fact that the company’s operating expenses rose 23%, mirroring its revenue growth to an astounding $15.63 billion. The weak earnings may have been due to rising costs in technology and online streaming.
Due to the
fact that Amazon often reinvests revenue into company growth, these numbers can’t
always be used to assess future growth. With nearly $4 billion in cash after
the calculation of debt, investors have nothing to worry about yet. Amazon’s
expectations for revenue for the next quarter lie in the $15-17 billion range,
indicating that the company should be able to keep up its growth rate. The fact
that it has not been profitable scared off loyal investors, sending shares down
$7, or nearly 3%. AMZN is up 40% this year.
Zynga(ZNGA) reported a loss of $0.01 per share, much less than the $0.04 analysts expected it to lose. Its quarterly revenue came in at $231 million. This is over 30% less than the amount it pulled in during the same quarter last year. Similarly, its number of monthly users decreased by nearly 20 million as users are quickly transferring over to apps and mobile gaming. Many smaller developers have come up with more addicting games, such as Candy Crush(which boasts an impressive 35 million players daily). Zynga has also had a change of management this month, recruiting Microsoft Xbox manager Don Mattrick as CEO in hopes of a turnaround. Zynga also decided to exit the online gambling industry, therefore forfeiting huge potential profits. The company shot up over 10% during market hours, following Facebook's lead, but quickly dropped after hours once its earnings report was released. CEO Marttick has stated that the next few quarters for Zynga may be shaky, sending shares down 14%.
Zynga(ZNGA) reported a loss of $0.01 per share, much less than the $0.04 analysts expected it to lose. Its quarterly revenue came in at $231 million. This is over 30% less than the amount it pulled in during the same quarter last year. Similarly, its number of monthly users decreased by nearly 20 million as users are quickly transferring over to apps and mobile gaming. Many smaller developers have come up with more addicting games, such as Candy Crush(which boasts an impressive 35 million players daily). Zynga has also had a change of management this month, recruiting Microsoft Xbox manager Don Mattrick as CEO in hopes of a turnaround. Zynga also decided to exit the online gambling industry, therefore forfeiting huge potential profits. The company shot up over 10% during market hours, following Facebook's lead, but quickly dropped after hours once its earnings report was released. CEO Marttick has stated that the next few quarters for Zynga may be shaky, sending shares down 14%.
Sources:
Associated Press
Reuters
Disclaimer: Trading stocks has extremely high risks, and should not be taken to lightly without a thorough understanding. This is written from a purely commentary point of view and is not meant to suggest buying, selling, or holding a stock. All traders must do their own research prior to investing. We (StockQuests) are unaffiliated with all of the companies that are mentioned on this blog, and can't be held responsible for any losses that may occur. Invest at your own risk.
Reuters
Disclaimer: Trading stocks has extremely high risks, and should not be taken to lightly without a thorough understanding. This is written from a purely commentary point of view and is not meant to suggest buying, selling, or holding a stock. All traders must do their own research prior to investing. We (StockQuests) are unaffiliated with all of the companies that are mentioned on this blog, and can't be held responsible for any losses that may occur. Invest at your own risk.
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