Amazon profits slump as it targets faster shipping
Amazon has reported a 26% decline in profit in the third quarter compared to the same period last year.
The fall comes as the e-commerce giant invests heavily in reshaping its delivery operation.
Net income decreased to $2.1bn (£1.6bn) in the third quarter, or $4.23 per diluted share, compared with net income of $2.9bn, or $5.75 per diluted share, in the third quarter of 2018.
Amazon has reported a 26% decline in profit in the third quarter compared to the same period last year.
The fall comes as the e-commerce giant invests heavily in reshaping its delivery operation.
Net income decreased to $2.1bn (£1.6bn) in the third quarter, or $4.23 per diluted share, compared with net income of $2.9bn, or $5.75 per diluted share, in the third quarter of 2018.
Revenue was up by 24% to $70bn, compared with $56.6bn in Q3 2018.
Amazon had previously warned investors during its last earnings call that it aiming to invest in overhauling its delivery operation to make one-day deliveries the standard for its Prime subscribers.
It spent more than it had planned in Q3 on the project. It plans to spend around $1.5bn more on the initiative this quarter, alongside investing in warehouse space and new retail products.
“We are ramping up to make our 25th holiday season the best ever for Prime customers — with millions of products available for free one-day delivery,” said Jeff Bezos, Amazon founder and chief executive. “Customers love the transition of Prime from two days to one day — they’ve already ordered billions of items with free one-day delivery this year. It’s a big investment, and it’s the right long-term decision for customers. And although it’s counterintuitive, the fastest delivery speeds generate the least carbon emissions because these products ship from fulfillment centers very close to the customer — it simply becomes impractical to use air or long ground routes.”
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