Net income is below Wall Street expectations
Net income increased to $2.6 billion in the second quarter, or $5.22 per diluted share, up from $2.5 billion, or $5.07 per diluted share, in second quarter 2018. But that gain fell short of Wall Street’s expectations, and the company’s stock fell in after-hours trading Thursday.
Costs are rising and Amazon is investing more in a bid to stay ahead of rivals, including Walmart, which offers free two-day delivery to customers without a membership fee. Amazon spent an estimated $800 million in the second quarter alone as it has moved to offer one-day delivery on more products. But the online retailer said the move is paying off.
“Customers are responding to Prime’s move to one-day delivery — we’ve received a lot of positive feedback and seen accelerating sales growth,” Amazon founder and CEO Jeff Bezos said in a statement. “Free one-day delivery is now available to Prime members on more than ten million items, and we’re just getting started.”
Looking ahead to the third quarter, Amazon is projecting net sales of between $66 billion and $70 billion, which would represent growth of between 17% and 24% compared with third quarter 2018. Operating income is expected to be between $2.1 billion and $3.1 billion, compared with $3.7 billion in the third quarter of 2018.