Amazon Shares Slump As Results Fall Short

Amazon shares have plunged 12% in after-hours trading as quarterly results missed Wall Street expectations.

The online retailer announced that annual sales have now topped $100bn (£69.7bn), but the latest earnings left investors unimpressed.

The group reported revenues for the fourth quarter of last year at $35.7bn (£24.9bn), 22% ahead of the same period last year while profits more than doubled to $482m (£336m).

Profit for the year of $596m (£415m) was up from a loss of $241m (£168m) in 2014. Annual net sales rose 20% to $107bn (£75bn).

But quarterly earnings were held back by a surge in operating expenses and slow growth in its cloud services business.

Amazon forecast sales of between $26.5bn (£18.5bn) and $29bn (£20.2bn) for the current quarter - a rise of between 17% and 28% on the same period last year.

Despite the market's pessimism, Amazon founder and chief executive Jeff Bezos was upbeat.

He said: "Twenty years ago, I was driving the packages to the post office myself and hoping we might one day afford a forklift.

"This year, we pass $100bn in annual sales and serve 300 million customers.

"And still, measured by the dynamism we see everywhere in the marketplace and by the ever-expanding opportunities we see to invent on behalf of customers, it feels every bit like day one."

Operating expenses for the fourth quarter rose by more than a fifth to $34.6bn (£24.1bn).

Amazon has been splashing out on services for members of its $99-a-year Prime loyalty programme - or £79-a-year in the UK - including one-hour delivery and original TV programming, as it seeks to attract customers in a highly competitive marketplace.

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