Amazon and Pandora Disappoint: Tech Winners & Losers

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NEW YORK ( TheStreet) –– Amazon.com shares tanked 11.6% to $317.00 after the company’s second-quarter earnings showed much higher losses than expected.

In its second quarter, the Seattle-based company lost 27 cents per share on revenues of $19.34 billion. Analysts polled by Thomson Reuters expected $19.34 billion in revenues, but with only a loss of 15 cents per share. This net loss was well ahead of the loss of $7 million in the second quarter 2013. Last quarter, Amazon earned 23 cents a share on $19.74 billion in revenue.

Net sales increased 23% year-over-year. The operating loss was $15 million this quarter, compared with $146 million in the first quarter and an operating income of $79 million a year ago. The company also issued third-quarter revenue guidance between $19.7 billion and $21.5 billion, in line with the consensus estimate of $20.83 billion. The operating loss guidance for next quarter is between $810 million and $410 million, a huge increase from the loss forecast by analysts of $25 million.

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Despite these disappointing results, many analysts remain bullish on Amazon. Bank of America Merrill Lynch analyst Justin Pope reiterated his “buy” rating but lowered the price target to $400 from $420. Deutsche Bank analyst Ross Sandler reiterated his “buy” rating, but lowered the price target to $375 from $400. JPMorgan analyst Doug Anmuth reiterated his “neutral” rating and lowered the price target to $340 from $350. William Blair maintained its “outperform” rating. Pacific Crest analyst Chad Bartley maintained his “outperform” rating and $460 price target.


Zillow shares rose 4.5% to $152.30 this morning following reports that it was close to making an acquisition.

Bloomberg reported yesterday that Zillow, the largest real estate website in the U.S., is seeking to buy its closest competitor, Trulia , for up to $2 billion in cash and stock, citing sources close to the matter. The sources said that the deal might be announced next week, or might full through. After the Bloomberg story was published yesterday, shares of Zillow jumped more than 15% to $145.76 while shares of Trulia spiked 32% to $53.74.

When reached for comment, Zillow spokeswoman Dawn Lyon said the company doesn't comment on rumors.

Zillow went public in 2011, and its shares have increased by a factor of seven since then. Trulia shares have tripled since its 2012 IPO. If the deal is completed, Trulia will be Zillow CEO Spencer Rascoff’s biggest acquisition. Zillow bought the real estate websites Streateasy.com for $50 million last year and HotPads for $16 million in 2012. Earlier this month, Zillow completed its eighth acquisition, purchased the Vancouver-based real estate software company Retsly