Amazon.com posted a lower quarterly net profit and thin operating margins that took some of the shine off the world's largest online retailer, sending its shares tumbling in after-hours trade.
Investors have come to depend on Amazon outpacing a soft e-commerce market, as it has taken market share and continued to launch new categories of goods to sell. But the modest results and strained margins took some of the luster off a retailer that many investors view as overvalued.
"It wasn't the blow-out quarter necessarily you've see from them in recent quarters,'' said McAdams Wright Ragen analyst Dan Geiman, noting that stock had had "such a good run in recent weeks.'"
Positive sentiment on the stock has pushed shares up a whopping 80-plus percent since the start of 2009—well in advance of the Nasdaq and outpacing main rival eBay. That gain has led many investors to deem Amazon, despite recent successes in a difficult consumer spending environment, as overly pricey.
Operating margins were 3.4 percent in the quarter, well below the 5 percent seen in the first quarter. At least two analysts had been expecting margins of 4.1 percent or 4.2 percent.