Amazon and Pandora Disappoint: Tech Winners & Losers

NEW YORK (TheStreet) –– Amazon.com (AMZN) shares tanked 11.6% to $317.00 after the company’s second-quarter earnings showed much higher losses than expected.

In its second quarter, the Seattle-based company lost 27 cents per share on revenues of $19.34 billion. Analysts polled by Thomson Reuters expected $19.34 billion in revenues, but with only a loss of 15 cents per share. This net loss was well ahead of the loss of $7 million in the second quarter 2013. Last quarter, Amazon earned 23 cents a share on $19.74 billion in revenue.

Net sales increased 23% year-over-year. The operating loss was $15 million this quarter, compared with $146 million in the first quarter and an operating income of $79 million a year ago. The company also issued third-quarter revenue guidance between $19.7 billion and $21.5 billion, in line with the consensus estimate of $20.83 billion. The operating loss guidance for next quarter is between $810 million and $410 million, a huge increase from the loss forecast by analysts of $25 million.

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Despite these disappointing results, many analysts remain bullish on Amazon. Bank of America Merrill Lynch analyst Justin Pope reiterated his “buy” rating but lowered the price target to $400 from $420. Deutsche Bank analyst Ross Sandler reiterated his “buy” rating, but lowered the price target to $375 from $400. JPMorgan analyst Doug Anmuth reiterated his “neutral” rating and lowered the price target to $340 from $350. William Blair maintained its “outperform” rating. Pacific Crest analyst Chad Bartley maintained his “outperform” rating and $460 price target.

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