Jan 31 Amazon.com Inc shares fell more
than 9 percent in early trading on Friday, after the online
retailer warned of a possible loss in the current quarter and
its quarterly results missed expectations in the holiday
At least seven brokerages cut their price targets on the
stock, by as much as $30 to a low of $415. Another seven raised
their price targets by as much as $100 to a high of $500.
Amazon shares were down at $372.81 in early trading. The
stock had gained by about a third in the last six months.
The world's biggest online retailer said it expects
operating results for the current quarter to range from a $200
million loss to a $200 million profit, compared with a profit of
$181 million a year earlier.
The outlook was somewhat conservative, reflecting Amazon's
focus on investing aggressively in growth opportunities and new
initiatives, analysts said.
"In addition to increased internal investment to build out
the digital library, distribution center capacity and enhance
offerings, ... Amazon may be facing further margin pressure due
to the success of its Amazon Prime offering," Benchmark analyst
Daniel Kurnos wrote.
Amazon charges users an annual fee of $79 for its "Prime"
two-day shipping and online media service, considered
instrumental in driving online purchases of both goods and
The company said it was considering raising prices for
Amazon Prime by $20-$40 in the United States due to higher fuel
and transportation costs and increasing usage.
Analysts said the price increase would add about $600
million to Amazon's annual revenue while still representing
compelling value to customers.
The company more than doubled its profit to $239 million, or
51 cents per share, in the fourth quarter, but fell short of
analysts' average estimate of 66 cents per share.
Amazon faced lofty expectations going into one of the most
heavily competitive holiday seasons in years, with retailers
vying to out-do each other with steep discounts.
"As much as we continue to hope for a 4Q unit acceleration,
AMZN continues to prove that its business is less holiday-driven
than many other retailers due to the high volume of 'staple' and
recurring unit sales," Susquehanna Financial analyst Brian Novak
At least seven brokerages raised their price targets on the
stock, saying the value created by Amazon's innovation and
investments in retail and the cloud should help the company to
grow more quickly.
(Reporting by Supantha Mukherjee in Bangalore; Editing by Savio