By Michelle Jones
Amazon.com (NASDAQ:AMZN) and Pandora Media (NYSE:P) both released their earnings reports last night, and investors were none too thrilled with the results. Wall Street is apparently no longer willing to stand for the idea that they have potential profits coming in the future. Investors want to see cold, hard facts that companies have strong fundamentals.
Amazon earnings deflate share price
Paul J. Lim of Time notes that while Amazon posted a great increase in revenue - 23%, to be exact - the company's losses per share were about twice as bad as Wall Street expected. The company has been expanding rapidly and promises great returns in the future, but investors are apparently tired of waiting for that future to arrive.
Amazon's net losses were 27 cents per share, and management said the next quarter really won't be any better. The company guided for an increase of 15% to 26% in net sales but operating losses of $410 million to $810 million. Management has lured investors in for years, promising great long-term potential as the ecommerce company dominates numerous markets and even begins offering its own consumer electronics devices.
On Thursday, the comments were pretty similar as it focused on Amazon's potential in the smartphone market. The company will soon begin shipping its Fire phone. However, investors want to see some profits in their hands, and Amazon doesn't look to be in a position to deliver any time soon.
Pandora Media still in the red
Another company that is seeing the same fate as Amazon is Pandora Media. The company posted solid sales growth but still runs in the red, reporting GAAP losses of 6 cents per share. That also was worse than Wall Street was expecting, which were losses of 4 cents per share.
Like Amazon management, Pandora also attempted to make the results look positive, emphasizing the company's mobile advertising success. Investors have been especially interested in this topic recently, pumping Facebook Inc. (NASDAQ:FB) stock up based on this metric. However, there's a huge difference between Facebook and Pandora. Of course Facebook is profitable, and investors may be starting to lose faith that Pandora Media ever will be profitable.