2 Letdowns From Amazon Earnings

2 Letdowns From Amazon Earnings

Amazon.com's stock tends to go its own way. Even after reporting surprisingly low profits last week, the company's shares bounced and ended the day higher.

In the video below, Fool contributor Demitrios Kalogeropoulos says that investors are right to focus on sales growth, which matters a lot more than the shrinking profits that Amazon announced. Still, he argues that there are two weak areas of the company's business worth watching closely: media sales and content expenses.

Amazon is spending heavily in both businesses, and yet its ecosystem is nowhere near as robust as Apple's and its streaming video service usage is nowhere near Netflix's levels. To start getting a good return on those investments, Amazon will need to see a boost in media sales and a spike in subscribers to its Prime shipping service.

The television landscape is changing quickly, with new entrants like Netflix and Amazon.com disrupting traditional networks. The Motley Fool's new free report "Who Will Own the Future of Television?" details the risks and opportunities in TV. Click here to read the full report!

The article 2 Letdowns From Amazon Earnings originally appeared on Fool.com.

Fool contributor Demitrios Kalogeropoulos owns shares of Apple and Netflix. The Motley Fool recommends Amazon.com, Apple, and Netflix. The Motley Fool owns shares of Amazon.com, Apple, and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.