SAN FRANCISCO – Amazon.com Inc. (AMZN) Tuesday posted a lower quarterly profit, in line with Wall Street targets, as the online retailer racked up higher costs from discount shipping programs and boosted technology spending.
Amazon shares fell 6 percent after the report.
Net income fell to $78 million, or 18 cents a share, matching the average forecast compiled by Reuters Estimates. In the year-earlier quarter Amazon had net income of $111 million, or 26 cents a share.
"The quarter was slightly in line to slightly better, but the guidance on the margin was somewhat disappointing for the June quarter," said David Garrity, an Internet analyst at Caris & Company.
Revenue rose 24 percent to $1.90 billion from $1.53 billion as the weak U.S. dollar helped boost the value of overseas sales and the company's fixed-price and free shipping programs attracted more customers. Analysts' revenue target was $1.89 billion.
Net sales grew 22 percent when the impact of the weak dollar was stripped out.
For the second quarter, the company said it would have revenue of $1.68 billion to $1.83 billion. Operating income is expected to be $50 million to $80 million, including stock-based compensation of $35 million, the adoption of an accounting change and other items.
Analysts polled by Reuters Estimates had expected second-quarter revenue of $1.69 billion.
Shares of Amazon, which closed down 2.5 percent at $32.71 on Nasdaq, slipped further to $30.61 in after-hours trade.
The company said its net shipping loss rose 29 percent to $55 million due primarily to free shipping offers and Amazon Prime (search) — a new program unveiled in February that provides unlimited two-day shipping for an annual fee of $79.
The company also boosted technology spending and invested in several areas such as its A9.com (search) search engine, Web services and additional development centers as it hired more computer scientists and software engineers.