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Amazon shares tumble despite 41% sales growth

chart_ws_stock_amazon.cominc.top(2).pngAmazon's shares have taken a pounding this year from skittish investors. By Julianne Pepitone, staff reporter


NEW YORK (CNNMoney.com) -- Amazon shares plunged 13% in after-hours trading Thursday after the company's second-quarter earnings came up far short of analyst expectations.

Amazon's sales are still growing fast: The company had revenue of $6.6 billion in the quarter ended June 30, up 41% from a year ago. Amazon's profit also rose, increasing 45% to $207 million.

But analysts hoped for better, and are keeping a close eye on Amazon's bottom line to see if intensifying competitive pressures knock the e-commerce giant off its game.

Forced by Barnes & Noble (BN) into an e-reader price war, Amazon.com slashed the price of its flagship Kindle to $189 last month. It later cut its high-end Kindle DX price tag by more than $100, to $379. Meanwile, Apple's (AAPL, Fortune 500) popular iPad -- which can store thousands of e-books -- could obliterate the entire stand-alone e-reader market within the next year or two.

Amazon tried earlier this week to draw attention to its bright spots. The company announced that sales of e-books for its popular Kindle reader now outnumber Amazon's sales of hardcover books. The company also said Kindle sales have picked up since last month's price cut, though it once again refused to disclose how many Kindles it has actually sold.

Amazon (AMZN, Fortune 500) said it expects third-quarter revenue to come in between $6.9 billion and $7.63 billion in revenue this quarter, in line with analyst estimates. To top of page

Index Last Change % Change
Dow 15,973.84 313.66 2.00%
Nasdaq 4,337.51 70.67 1.66%
S&P 500 1,864.78 35.70 1.95%
Treasuries 1.75 0.10 6.33%
Data as of 10:01pm ET
Company Price Change % Change
Bank of America Corp... 11.95 0.79 7.08%
General Electric Co 28.26 0.81 2.95%
Cisco Systems Inc 25.11 0.43 1.74%
Chesapeake Energy Co... 1.59 -0.19 -10.67%
Freeport-McMoRan Inc... 5.53 0.64 13.09%
Data as of 4:15pm ET
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