Amazon wowed investors when it reported a 51 percent surge in sales for the second quarter and said revenue for the current quarter would beat expectations. Shares of the e-commerce giant shot up more than 6 percent on the figures in after-hours trade, even though second-quarter net profits fell as the company’s margins continued to be pressured by heavy spending on distribution, technology and digital content.
Netflix shares took another beating on Tuesday after it warned a day earlier it was expecting subscriber growth to stall in the third quarter in response to price hikes announced this month. That didn’t stop several analysts from raising their price targets on the video rental company’s stock, though, as they took the company at its word that the effects of the subscriber slowdown would be temporary. According to one analyst interviewed by Reuters, the gain in average revenue per user in the fourth quarter will “more than offset” the expected cancellations from the higher prices. Another expressed optimism about the company’s plans to expand into Latin America early next year.
Netflix says it’s expecting its subscriber growth in the United States to slow in the coming quarter. The warning to investors came as the popular video rental company also reported second-quarter revenue that missed Wall Street expectations. The double-shot of bad news sent the company’s shares down about 9 percent in late trading.
BlackBerry maker Research in Motion delivered on a promise it made last month to pare back its global workforce . . . and then some. The Canadian company announced it is laying off 2,000 staffers – or 11 percent of its workforce – in an effort to cut costs and offset sales declines in the mobile market, which is increasingly dominated by Apple and Google. Analysts are split on whether the cost cuts will do much to help the firm regain a competitive position. “The problem is you can’t cut your way into growth or market leadership, and while I’m sure there was fat at RIM, the core problem sits squarely with management,” Ed Snyder from Charter Equity Research told Reuters. Another analyst, however, argued that the cuts were a necessary step for RIM as it adjusts to a “new growth, or sales, reality.”