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Amazon Is Plunging: What Wall Street's Saying

Updated from 12:28 p.m. to include thoughts from Citigroup analyst.

NEW YORK (TheStreet) -- Amazon's (AMZN - Get Report) first-quarter results were aided by an equity investment, as the e-commerce giant posted revenue that was better-than-expected, but concerns about the investment mode are starting to weigh on investors' minds, and their wallets.

For the first-quarter, Amazon earned 23 cents a share on $19.74 billion in revenue, as net sales increased 23% year-over-year. The company noted a $10 million favorable impact from foreign currency throughout the quarter. On the conference call, CFO Tom Szkutak noted Amazon received $60 million in equity income as Living Social, a daily deals site Amazon has an investment in, sold its South Korean business.

Operating income decreased 19% to $146 million in the first-quarter, compared with $181 million in first quarter 2013, as the company continues to invest in its businesses. On the conference call, Amazon noted unit growth rose 23% versus 25% last quarter, while third-party (3P) unit growth was 23%, compared to 25% last quarter.

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Analysts surveyed by Thomson Reuters were expecting Amazon to earn 23 cents a share on $19.4 billion in revenue for the quarter. Analysts surveyed by Estimize were expecting Amazon to earn 25 cents a share on $19.63 billion in sales.

Shares of Amazon were sharply lower in Friday trading, off 9.1% to $306.50.

After the recent price increase on Amazon Prime, Amazon said it was encouraged by what it's seen so far on Prime, noting that subscribers were growing week-over-week, after the price increase, but that it was still very early. Amazon raised the price of Prime in mid-March to $99 a year, up from $79 a year.

Amazon declined to comment about recent rumors that it was working on its own delivery network, potentially disrupting the relationship it has with UPS (UPS) and to a lesser extent, FedEx (FDX). However the company said it was continuing to work to get closer and closer to customers.
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