MarketWatch First Take: Amazon spending ahead of holidays hurts profits

Amazon.com Inc. disappointed investors with a lower-than-expected third-quarter profit, as the company beefed up its spending on fulfillment centers, shipping costs, video content and product development ahead of the all-important holiday season.

Without Amazon Web Services (AWS), its cloud-based computing service business, Amazon would have lost money. AWS on its own reported revenue of $3.2 billion and operating income of $861 million. Amazon’s total operating income in the quarter was $575 million, with net income of $252 million, or 52 cents a share, while analysts were looking for about 78 cents a share.

The company’s spending is not going to let up anytime soon, either, with Amazon AMZN, -0.51% issuing one of its incredibly wide-ranging outlooks.The company said its operating income for the fourth quarter will range from $0 to $1.25 billion, compared with a profit of $1.1 billion in fourth quarter a year ago.

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