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Amazon.com Inc. profit fell for the first time in more than two years, according to a quarterly earnings report released Thursday, as the e-commerce giant again ramps up spending.
Amazon AMZN, +1.06% reported third-quarter profit of $2.1 billion, or $4.23 a share, on sales of $69.98 billion. Sales rose from $56.58 billion a year ago, but earnings declined from $5.75 a share, the first time Amazon earnings have shrunk year-over-year since June of 2017. Analysts on average expected Amazon to report earnings of $4.59 a share on sales of $68.83 billion, according to FactSet.
Amazon had been on a run of record profits until last quarter, when increased spending on transitioning to one-day delivery for Prime customers and other initiatives began showing up in its results. The e-commerce giant reported profit topping $10 billion in 2018, more than triple its previous annual record, and had reported record quarterly profit totals for four consecutive quarters before breaking that streak with second-quarter results.
Amazon shares fell more than 6% in late trading Thursday after the results were announced, following a 1.1% gain to $1,780.78 in the regular session. The stock has gained 18.6% in 2019, but has declined more than 10% in the past three months, as the S&P 500 index SPX, +0.19% has fallen about 0.5%.
Amazon prepped investors and analysts for the spending increase and resulting profit decline, projecting an $800 million charge in the second quarter for the one-day delivery change. Amazon ended up spending more than that in the second quarter, however, and Chief Financial Officer Brian Olsavsky said in July that Amazon would spend even more in the third quarter.
Amazon Web Services, Amazon’s leading cloud-computing business, reported revenue of $9 billion and operating income of $2.26 billion, 71.6% of Amazon’s total operating profit.
