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Amazon Warns of Likely Losses in Q1 2012

Amazon is likely to post a jarring operating loss during the first quarter of the running year, the company has warned. Apparently, the retail giant is expecting its first quarterly result to be somewhere around the $200 million loss to $100 million profit range.

According to Amazon, this below-expectation quarterly result can be primarily attributed to a huge number of expansion plans that involved new product lines and new geographical regions. However, despite such a drop in the profit margin, Amazon is not going to abstain from continuing its heavy investments.

"The wide range reflects the investments that we are making," Amazon Chief Financial Officer Tom Szkutak told reporters on a conference call. "We have a lot of opportunities to invest in" he added reports Reuters UK.

Amazon's first-quarter forecast suggests the company may continue with this heavy investment. However, analysts are of the opinion that any fall in the Amazon share prices could eventually result in a shock wave in the capital market.

Szkutak very prudently attributed the dent in Amazon's growth to the weak European economy. He said that, "flooding in Thailand caused some supply problems."

The executives of Amazon in order to justify their heavy spending said that, the growth opportunities such as the company's Kindle e-reader and tablet business, were so mouth watering that they felt, it would be worth making investments.