2014 hasn't been exactly kind to shares of worldwide e-tailer extraordinaire Amazon.com (NASDAQ:AMZN). Amazon stock has plunged around 11% so far this year, while shares of its streaming opponent Netflix (NASDAQ:NFLX) have soared over 20%.
Along with other tech titans like Apple and Microsoft, Amazon.com earnings will be released on July 24. And if some of the early signals are any indication, Amazon's earnings might prove frustrating for its investors.
Amazon.com earnings: Big growth, no profits
To those familiar with Amazon.com, the subhead above probably doesn't come as much of a shock. In fact, it quickly crystalizes Amazon.com's longtime attitude about short-term profits versus reinvesting for the long-term.
Amazon's operations are more varied today than ever, with its moving into once seemingly disparate fields like cloud computing and streaming entertainment. However, as it goes toe-to-toe against powerful competitors in these spaces (like Netflix), Amazon still loves to aggressively offer low prices or reinvest profits into its various business lines in order to consolidate long-term market share. A key example of this is Amazon.com's ongoing spending on new original content to combat the huge success of Netflix's own original programming.
Trying to match the likes of Netflix in spending can have deleterious effects on quarterly performance, part of why analysts are forecasting a widening loss this quarter. However, it's also a tried-and-true tactic that has proven hugely successful over Amazon.com's storied rise. In the video below, tech and telecom specialist Andrew Tonner breaks down exactly what investors should watch for when Amazon.com earnings are announced later this week.