Amazon profit disappoints

AMAZON shares plunged last night as the online retail giant’s second quarter profits disap-pointed investors.

The company said sales rose by 20pc to £50.9bn in the three months to June 30, beating analyst forecasts of £50.2bn.

But its profits came in at just under £2.1bn, an increase of just 4pc, falling shy of Wall Street predictions of £2.2bn.

Jeff Bezos, Amazon’s boss and founder, talked up the company’s continuing sales growth and said one-day delivery through its Prime service was proving popular.

But just minutes after the results were unveiled, Amazon shares were down by as much as 3.5pc in after-hours trading.

It came as Google parent Alphabet outperformed expectations, sending its shares rising by 7pc in late trading. Alphabet reported second quarter revenues of £31.3bn, an increase of 19pc compared to the previous year.

The vast majority of its sales come from advertising sold through Google.

It also revealed quarterly profits had more than tripled to £8bn.

However, both sets of results came as the spectre of a probe into the tech industry by the US Department of Justice was looming. Politicians in the US have called for Silicon Valley’s giants to be broken up because of their dominance.

Yesterday Steve Mnuchin, Donald Trump’s Treasury Secretary, stoked fears of drastic action. ‘I think if you look at Amazon, they’ve destroyed the retail industry across the United States so there’s no question they’ve limited competition,’ he told CNBC.