Online shopping company Amazon yesterday said earnings plunged nearly 58 per cent as it invested in new technologies and its toy business.
Despite profits dropping to $22 million (£12 million) in the three months to June 30 , sales jumped 22 per cent to $2.14 billion (£1.16 billion) which the company said was down to providing customers with what they want - such as offering cheap or free shipping deals.
Shares in New York tumbled more than 12 per cent in after-hours trading after Amazon said it planned to invest heavily in its new toy sales strategy and slash prices on many products. It also said operating income for the year would be lower than previous forecasts.
It also projected lower operating income for the year than previously forecast.
The latest spending plans left some wondering when the investments would pay off for investors and not just customers.
"In some respects it's kind of one thing after another," said Dan Geiman, an analyst with McAdams Wright Ragen.