Amazon headlined third-quarter financial results with a 20% year-on-year increase in sales to $20.58bn.
But the company also posted a net loss of $437m for the period, compared with a net loss of $41m a year ago.
The company said it expected losses to continue in the current quarter, to as much as $570m, which analysts ascribe mainly to a lack of hardware sales and costly acquisitions and investments.
In August, Amazon spent $1bn on the acquisition of game-streaming service Twitch and committed $100m to original television projects.
Analysts said the acquisition of Twitch is aimed at helping Amazon beat video-streaming competitors such as Netflix and Google’s YouTube, but the investment is yet to bring returns.
The company also announced that it will take a $170m charge for unsold Fire Phones and other related costs. Amazon had $83m worth of unsold Fire Phones at the end of the third quarter.
Despite the increase in sales, Amazon's share price fell by 11% to $278.88 in after-hours trading.
READ MORE ON AMAZON
- Amazon to acquire game streaming service Twitch
- Amazon’s share price falls 6% on quarterly results
- Amazon shares fall despite strong Q4 results
- Amazon Web Services reaches its 8th birthday
- Amazon nets lion’s share of $10bn public cloud market
- CW Special Report: Amazon Web Services (AWS)
- Amazon Kinesis: When to use Amazon's new big-data processing service
- Amazon's WorkSpaces: Why is it needed?
- Amazon Web Services beefs up channel programme
- Amazon datacentre glitch hits top web services
- Amazon CTO urges businesses to open up to ideas
The share price was already down 13% since Amazon’s second-quarter results announcement in July, when it also missed targets and raised concerns about spending.
Analysts ascribed this fall mainly to Amazon’s projected revenue growth of 7% to 18% in the current quarter, compared with the fourth quarter of 2013.
The company said it expected net sales of between $27.3bn and $30.3bn for the fourth quarter, below average analysts’ expectations of $30.9bn.
“As we get ready for this upcoming holiday season, we are focused on making the customer experience easier and more stress-free than ever,” said Jeff Bezos, founder and CEO of Amazon.com.
Investors have historically overlooked Amazon’s persistent lack of profit because of year-on-year growth rates of more than 20%, according to the Guardian.
“That kind of takes the top line growth story off the table. And now it's got to deliver on profit margins,” Rob Plaza, senior analyst at Key private bank told the paper.
Amazon chief financial officer Tom Szkutak said a stronger dollar had reduced its fourth-quarter revenue forecast by about 2.5 percentage points.
Read more on E-commerce technology
AWS talks up Q4 increase in large customer wins as global market share drops
Amazon CEO cites enterprise shift in cloud spending priorities for upbeat Q2 results
AWS suffers year-on-year drop in profit and revenue growth as enterprises curb cloud spend
Amazon CEO Andy Jassy confirms 9,000 further job cuts across AWS, Twitch and its advertising arm