Amazon shares plummet afterhours due to earnings miss

Shares in ecommerce giant Amazon plunged by as much as 6.8% in after-hours trading in New York on Thursday after the company fell well below analyst estimates for its third quarter earnings.

Amazon apportioned the blame for the earnings miss on a ramping up of investment during the latter half of 2016, as it increases spending on the construction of distribution warehouses and purchasing high quality video content for its streaming services.

The company reported earnings per share of 52 cents, which was up some 200% from the corresponding quarter in 2015, but well short of the 78 cents predicted by analysts in advance of the report. Net income for the quarter came in at $252m.

It was the company's sixth straight profitable quarter in a successful year which has seen Amazon also post three successive record-breaking profits until Thursday's results.

Total operating expenses increased by 31.5% to $10.94bn, brought on by the investment in Amazon Web Services and its Prime subscription service.

Amazon's stock has risen over 21% during the last year, despite the fall after the close yesterday.

Chief executive officer Jeff Bezos pointed to the company's new technology as cause for optimism as the holiday season approaches.

Its new voice-activated virtual assistant Alexa was launched in Europe during the quarter, along with its Echo speaker.

"Alexa may be Amazon’s most loved invention yet," said Bezos in a statement. "And she’s just getting better. Because Alexa’s brain is in the cloud, we can easily and continuously add to her capabilities and make her more useful — wait until you see some of the surprises the team is working on now."