Amazon profits fall by more than a third

Online retailer Amazon has reported a dip in profits as the cost of investing in new projects offset a further rise in quarterly sales.

The maker of Kindle electronic reading devices earned $82 million (£53.3m) in the first quarter of the year, down 37 per cent on a year earlier.

Revenues rose 22 per cent to $16.1 billion, but that was down compared with the 36 per cent growth recorded during the first quarter of 2012.

International revenues grew 16 per cent, well below the 31 percent surge in the same period last year.

Gross profit margin, a closely-watched measure of profitability, came in at a better-than-expected 26.6 per cent, compared with 24 per cent a year earlier.

Seattle-based Amazon has been investing much of its income in enhancing its distribution networks, while it soon plans to debut original TV programming on its website.

Currency fluctuations weighed on the group’s results as a weak yen translates to fewer dollars on sales in Japan.

For the current quarter, Amazon expects revenues of between $14.5bn and $16.2bn. The midpoint of this range is lower than the $15.9bn that Wall Street analysts had expected.