Amazon’s push to becoming a $1 trillion company once again hit a speed bump on Thursday, with the e-commerce giant narrowly missing Wall Street’s earnings estimates when it reported its Q2 financial results — sending the company’s stock down slightly in the process.
Amazon reported earnings of $5.22 per share, equalling a profit $2.6 billion but falling short of analyst estimates of $5.57 EPS. The company’s sales increased 20% year-over-year, hitting $63.4 billion in revenue, good enough to top analyst projections by about $1 billion.
This was Amazon’s first report since the company set aside about $800 million to speed up its deliveries to Prime members.
“Customers are responding to Prime’s move to one-day delivery — we’ve received a lot of positive feedback and seen accelerating sales growth,” Amazon CEO Jeff Bezos said in a statement. “Free one-day delivery is now available to Prime members on more than ten million items, and we’re just getting started.”
Amazon shares dipped 2.8% in early after-hours trading, hitting $1,918 per share. Seattle-based Amazon, which became the second company ever to hit the $1 trillion valuation mark last year, had nearly reached the milestone again heading into Thursday, with a market cap of $971 billion. The after-hours dip appears to have paused its march back towards the $1 trillion mark, at least for now. Before earnings, Amazon’s stock price had climbed nearly 30% since the beginning of the year.
The increased focus on quick shipping came wasn’t cheap; Amazon’s shipping costs swelled 36% year-over-year to $8.1 billion during Q2.
Amazon did not provide an update on how many Prime members it has. The company said in April 2018 it had more than 100 million global Prime members, who spend $119 annually for faster shipping, Prime Video, and other perks.
Earlier this month, Amazon Studios grabbed 47 Emmy nominations, more than doubling its total from a year ago. “The Marvelous Mrs. Maisel,” starring Rachel Brosnahan and Alex Borstein, led the pack with 20 nominations. Last week, Amazon Studios brought in Elaine Paul as its new chief financial officer, bringing her over from Hulu, where she held the same position. And on Wednesday, the studio signed “Jack Ryan” star John Krasinski to a three-year first-look TV deal.
In April, Amazon put an end to its lingering streaming feud with Google, bringing its Prime Video app to Chromecast, while Google-owned YouTube returned to Fire TV. The agreement brought an end to one of the tech world’s most notorious clashes. At one point, Amazon stopped selling Chromecast devices, before softening its stance late last year. And at the end of 2017, Google pulled YouTube from Amazon’s Fire TV and Echo Show.
The Justice Department announced earlier this week it will look at anti-competitive practices among several major tech companies. Although Amazon was not specifically mentioned by the Department, the review could open the company up to increased scrutiny.
Amazon will hold a call to discuss its earnings at 2:30 p.m. PST on Thursday.