Amazon may be in for blue Christmas

Associated Press

NEW YORK

It might be a blue Christmas for Amazon.

The world’s largest retailer gave a disappointing forecast for the crucial holiday quarter. The company also reported a wider loss than analysts expected for the third quarter.

Thursday’s financial results could end investors’ patience with Amazon’s slim profit and its strategy of investing heavily in new products and services to spur revenue growth. The stock price tumbled 11 percent in after-market trading. That’s on top of the 22 percent decline the stock has suffered already this year.

Amazon has long focused on spending the money it makes to grow and expand into new areas. It launched a smartphone, the Fire, earlier this year, and has been offering a set-top video-streaming device, a streaming video service and several tablets and e-book readers.

The company also has been investing in services for its $99-a-year loyalty program, Prime. It has added a grocery delivery service and music streaming for Prime members as well as offering original TV shows such as the critically acclaimed “Transparent” starring Jeffrey Tambor.

But it is increasingly clear that what investors want more than revenue growth is a solid profit.

“The market was looking for more in terms of revenue and operating income and the fourth-quarter outlook,” said Morningstar analyst R.J. Hottovy. “It’s going to be a competitive landscape for retailers this holiday season, and retailers will compete aggressively for consumers.”

In a conference call with analysts, Chief Financial Officer Thomas Szkutak defended its strategy and said the company is focused on “using its capital wisely so that over time, we get good returns on invested capital.”