Amazon misses on both revenues and profits, but the stock is up

According to Bloomberg, Amazon reported its Q2 financials after the close of the market today. Gross revenues were $12.8 billion, just short of the consensus analyst estimate of $12.9 billion but still up 29% year-over-year. Net income, however, was only $7 million, or $0.01/share, compared with $191 million or $0.41/share a year ago, and below the $0.03/share forecast by analysts.

The company claims that the decline in profits was due to big investments in distribution centers, but another factor was likely to be declines in sales of the Kindle Fire and Kindle eReaders. Analyst Mark Harding estimates that Amazon sold only 670,000 Kindle Fires in Q2 due to customers' expectations of an updated model (or models) later this year.

Amazon expects a Q3 loss of $50 million to $350 million compared to analyst expectations of a profit of $119.6 million, on sales of $12.9 billion to $14.3 billion, vs. analyst expectations of $14.1 billion. The company has built eight new fulfillment centers this year and plans to build ten more before the end of the year, and much of that expense will be loaded into Q3.

Amazon's stock closed at $220.01, and is currently priced at $222.80 in after-hours trading.