Amazon’s streak of record profits ends

Online giant Amazon.com Inc.’s record quarterly profit streak has ended.

Packages pass through a scanner at an Amazon fulfillment center in the US. Picture: AP

Amazon.com Inc.’s record quarterly profit streak has ended, as the online retailer faced higher shipping costs, slowing growth from its cloud-computing business and a steeper loss in its overseas retail business.

The company’s second-quarter profit rose 3.6 per cent from a year ago to $US2.63 billion after more than doubling last quarter. It missed analysts’ consensus estimate. Amazon had posted consecutive best-ever profits for the previous four quarters.

Amazon’s shipping costs jumped 36 per cent from a year ago - after hovering above 20 per cent in recent quarters - in part because the company invested $US800 million to make one-day free shipping the standard for Prime members, instead of two days.

The company’s overall costs were up 21 per cent partly because it incurred compensation-related expenses in the quarter.

Amazon’s sales grew 20 per cent to $US63.4 billion in its second quarter, reigniting quarter-to-quarter growth after shrinking the past four periods.

The results sent Amazon’s shares down 2.7 per cent in after-hours trading on Thursday to $1US,921 a share. Before the late-afternoon report, the stock was up 30 per cent this year, giving the company a market value of around $US981 billion.

Dow Jones Newswires