Big losses see Amazon's shares hit 12-month low

Investors vote with their feet amid few signs the firm's strategy of acquisitions, price cutting and gadget loss-leaders is working

Amazon's share price hit a 12-month low yesterday as the company revealed higher than expected losses on an earnings call with investors.

Shares fell more than 11 per cent in after-hours trading in New York, to $278.62, their lowest point in more than a year, after Amazon reported a loss of $437m (£273m) for the third quarter - a steep rise from its $41m loss in Q3 2013, and also up from the $126m lost in Q2.

Operating expenses grew to $21.1bn, compared with $17.1bn last year.

Investors have been nervous for some time about Amazon's strategy of slashing prices of its cloud services, offering hardware such as the KindleFire tablet at a loss, while at the same time continuing to make major acquisitions, the latest being the $1bn acquisition of livestreaming video service Twitch. The firm has also invested heavily in expanding existing retail sevices such as Prime, grocery deliveries and digital media.

Amazon has also been forced to write off $170m because of poor sales of its flagship smartphone, the FirePhone. At the same time revenue growth from cloud services is slowing year-on-year.

With few signs that any of these strategies are working for investors, they are now voting with their feet. Shares in the firm have fallen nearly 20 per cent since the beginning of this year.

However, in a statement, CEO Jeff Bezos all but ignored the financial figures, choosing instead to focus on Amazon's appeal to customers as Christmas approaches.

"As we get ready for this upcoming holiday season, we are focused on making the customer experience easier and more stress-free than ever," he said.

Talk of longer-term strategy was left to CFO Thomas Szkutak.

"We've been, for several years now, in investment mode because of the opportunity in front of us. There is still lots of opportunity in front of us, but we know we have to be selective," he said during the call.