Tuesday, January 31, 2012

Amazon Hints an Operating Loss is Possible for Q1 (NASDAQ: AMZN)

Amazon Warehouse
Amazon.com Inc. (NASDAQ: AMZN): fell by 8.71% or $-16.94/share in after hours trading to $177.50 as the company warned that an operating loss may be in order for Q1 this year.

The company has been increasing spending which is expected to have a negative impact on profits. It is no secret that Amazon.com has among the highest paid employees in the U.S. In fact, Amazon.com has been growing at least twice as fast as the entire e-commerce sector in recent years. In order to keep up the pace, Amazon had to grow in new markets which resulted in high spending thereby having a negative effect on near term profits.

In today's trading session, AMZN traded higher by 1.19% or $2.29/share to $194.44. In the past year, the shares have traded as low as $160.59 and as high as $246.71. On average, 5,924,230 shares of AMZN exchange hands on a given day and today's volume is recorded at 12,754,917. The shares are currently trading below the 50-day and 200-day moving averages which indicates that the shares have been experiencing downward momentum. The stock may bounce back to test the 200-day moving average. Thus, you may want to pay close attention for a move up to the $182.08 area but be careful because the stock may face selling pressure at this level.

Amazon's Chief Financial Officer Tom Szkutak told reporters that there is tremendous opportunities for investment and that's why you're seeing the company spend so much in Q1. Amazon.com, Inc. (Amazon.com) is a customer-centric company for three primary customer sets: consumers, sellers and enterprises.

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