Amazon's second quarter results were mixed and the third quarter outlook disappointed.
The e-commerce giant reported second quarter earnings of $7 million, or a penny a share, on revenue of $12.83 billion, up 29 percent from a year ago.
Wall Street was looking for earnings of 2 cents a share on revenue of $12.88 billion. Amazon's revenue clearly fell short of expectations, but the earnings results for the second quarter were more debatable. Amazon said that the second quarter earnings included a loss of $65 million related to the integration of Kiva Systems, which was recently acquired.
If you back out those integration costs, Amazon's profit would have been $72 million, which was better than net income of $20.8 million projected by analysts.
The third quarter outlook, however, clearly was off the mark for Amazon. The company projected and operating loss for the third quarter between $350 million and $50 million. Wall Street was looking for an operating profit of $164 million.
Amazon also said its sales for the third quarter would be $12.9 billion to $14.3 billion. Wall Street was expecting $14.09 billion.
With those moving parts it's no surprise that investors weren't quite sure what to make of Amazon's results. After-hours trading in Amazon was indecisive.
In a statement, Amazon CEO Jeff Bezos talked up Amazon Prime and as the "best bargain in the history of shopping."
By the numbers:
North America accounted for 57 percent of sales. International sales were 43 percent of revenue.
The international unit delivered a second quarter operating profit of $16 million. And North America had operating income of $344 million.
Other second quarter revenue, led by Amazon Web Services, was $554 million, up from $359 million a year ago. Other also had the fastest revenue growth in North America with growth of 58 percent.
Inventories were $4.38 billion as of June 30, down from $4.99 billion on December 31.
Amazon spent $657 million on assets such as Website development and software.
This story was first published as "Amazon forecasts Q3 operating loss; Q2 mixed" at ZDNet's Between the Lines.