In my article Rethinking Global I mentioned the outage at Amazon’s Cloud servers last week. Another shockwave hit Amazon tonight as it reported a drop of one third in its earnings in Q1. This despite a massive 38% increase in revenues to $9.86b. An operating margin of 3.3% was well below the 3.8% expected. This was all as a result of considerably increased investment in technology and its distribution network.
The knee jerk reaction in after-hours trading was to write Amazon’s shares down over 5%. But they soon recovered back to close to the closing price.
Amazon is a real powerhouse in online retailing. Its revenue growth shows that its investment is well judged. Maybe the market quickly gathered that too!