Amazon posted a $126m loss for the second quarter of 2014, a massive increase compared with the $7m it lost in the same period last year.
The loss came despite sales increasing by 23 percent to hit a whopping $19.3bn, compared with $15.7bn in the same period in 2013. Despite this growth, though, Amazon posted an operating loss of $15m in the second quarter, compared with an operating income of $79m in the second quarter of 2013.
Furthermore, it said it expects its operating loss to be between $410m and $810m in Q3, compared with a $25m loss in Q3 2013. Amazon did not give a reason for such a huge predicted increase in these losses.
Amazon CEO Jeff Bezos did his best to put a positive spin on the results, claiming the sales growth showed new products and services from the firm were proving popular. “We continue working hard on making the Amazon customer experience better and better,” he said.
He also touted some of the new Amazon Web Services (AWS) products the firm had launched: "For our AWS customers we launched Amazon Zocalo, T2 instances, an SSD-backed EBS volume, Amazon Cognito, Amazon Mobile Analytics, and the AWS Mobile SDK, and we substantially reduced prices."
Amazon said AWS saw strong growth over the quarter, with usage growth reaching almost 90 percent compared with the same period last year. Amazon also increased the AWS team by "thousands of employees" and said it expanded the AWS infrastructure, enterprise and public-sector sales capabilities, as it seeks to maintain its growth in this space.
Although Amazon does not break out the income from its AWS services, it could well be the case that its price war with the likes of Google is hurting its bottom line, as the $126m loss it posted may indicate.
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