Online retail giant Amazon's shares dropped by 7.2 per cent to $254.81 (£163) on the NASDAQ stock exchange, after the firm forecasted that it could make a significant loss in the second quarter of 2013.
Amazon predicted an operating loss of $340m (£219m) to a profit of $10m (£6.4m) in its second quarter 2013 guidance, compared to a $107m (£69m) profit in the same quarter last year.
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"This guidance includes approximately $340m for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional business acquisitions, investments or legal settlements are concluded and that there are no further revisions to stock-based compensation estimates," it said.
Net income in the first quarter dropped 37 per cent to $82m (£52.8m) compared to $130m (£83.8m) in the first quarter of 2012, but net sales increased 22 per cent to $16.07bn (£10.36bn) compared to $13.18bn (£8.5bn) in the comparable period last year. Amazon said $13.27bn (£8.56bn) of the sales were on products, with the remaining $2.79bn (£1.8bn) on services.
The company has been focusing on the film and TV product arm of Amazon.com, Amazon Studios, as well as the launch of the Kindle Fire HD 8.9" in the UK, Japan and other European countries.
In the last few months Amazon Web Services launched several add-ons to its cloud services including Redshift, OpsWorks, Elastic Transcoder and CloudHSM.
The firm's profit margins have been razor thin as it invests heavily in its distribution network, e-commerce platform and consumer products range. Profits may also be affected by discounted products and services; for example, Amazon Web Services has lowered prices seven times so far in 2013, the company claimed.
