LOS ANGELES (AP) - Online retailer Amazon.com Inc. on Thursday reported muted second-quarter earnings and projected an operating loss for the current quarter as it absorbs the costs of a warehouse technology acquisition and plans to spend more on order-fulfillment centers ahead of the holidays.
Amazon said its profit was hurt by a $65 million loss related to its acquisition of Kiva Systems Inc., a warehouse technology company that Amazon agreed to buy in March for $775 million in cash. The deal closed on May 1. Amazon is hoping that Kiva's automated systems help boost productivity and improve profitability in the long run.
The Seattle-based company said it expects third-quarter revenue to grow between 19 percent and 31 percent from a year ago. That amounts to sales of $12.9 billion to $14.3 billion. The midpoint is short of the $14.1 billion expected by analysts, according to FactSet.
It also forecast a third-quarter operating loss of $50 million to $350 million.
Chief Financial Officer Tom Szkutak said the projected loss was due in part to investment in the company's fulfillment centers ahead of the all-important holiday quarter. It plans to open 18 new fulfillment centers this year and has opened six so far, he said.
After initially falling, Amazon's shares rose $2.63, or 1.2 percent, to $222.64 in extended trading following the release of the results.
Amazon reported net income in the three months to June 30 came to just $7 million, or a penny per share, a drop of 96 percent from $191 million, or 41 cents, a year ago.
That matched analysts' meager expectations.
Revenue grew 29 percent to $12.83 billion, which was short of the $12.90 billion expected by analysts.
Amazon said that revenue was weighed by currency movements to the tune of $272 million, which the company had forewarned of in April.
Sales of digital goods like Kindle e-books, music and movies rose 13 percent to $4.12 billion, while sales of electronics and other items rose 38 percent to $8.16 billion.
The Kindle Fire, a $199 tablet tailored to handle purchases from Amazon.com, remained the company's top-selling item.
For now, it appears investors are giving the company's lackluster forecast a pass. Earnings for the fiscal year through December are estimated by analysts to be just $1.17 per share, meaning shares are trading at an eye-popping 190 times earnings.
Apple Inc. shares trade at around 13 times earnings while Google Inc. shares trade at around 14 times earnings.