Amazon's net income declined in the first three months of the year even though revenue increased 22%, as the online retailer continued to spend heavily on order fulfillment and rights to digital content.
The world's largest online retailer, which also sells the Kindle devices and services, said today that it earned $82m, or 18 cents per share, in the first quarter.
That is down 37% from $130m, or 28 cents per share, the same time a year earlier. But it is higher than the 7% expected by analysts polled by FactSet.
Quarterly revenue rose 22% to $16.07 billion, from $13.19 billion. Analysts had expected $16.14 billion.
Amazon's operating expenses rose 22% to $15.9 billion, from $13 billion.
The company has been investing a lot of its income in enhancing its distribution network, its shopping website and its Kindle business as part of a long-term growth plan. Because of that, and deep discounts it offers customers, Amazon's profit margins have been thin.
For the current quarter, Amazon said it expects revenue of $14.5 billion to $16.2 billion. The midpoint of the range is lower than the $15.92 billion that analysts had expected, but the company typically gives a conservative forecast.
Currency fluctuations, especially a weak yen, are also weighing on Amazon's results, as has been the case for other technology companies. A weak yen translates to fewer dollars on sales in Japan.
Excluding the effects of currency rate changes, revenue would have increased 24% rather than 22% in the first quarter.
Amazon is stretching well beyond online retailing and the Seattle-based company soon plans to debut original TV programming. Amazon is running introductory pilots for 14 TV shows on its website for anyone in the US, UK and Germany to watch. Viewers will get to help decide which shows get additional episodes.
"The pilots are out in the open where everyone can have a say," Jeff Bezos, Amazon's founder and CEO, said in a statement.
"I have my personal picks and so do members of the Amazon Studios team, but the exciting thing about our approach is that our opinions don't matter. Our customers will determine what goes into full-season production,'' he added.
