Online retailer Amazon has reported its second quarter financial performance, with a larger-than-expected $0.27 per share loss on revenue of $19.34bn (£11.39bn).

While revenue grew 23 per cent year-on-year, its operating income dropped to -$15m, down considerably from $79m in Q2 of last year, and led to a net loss of $126m in the quarter. This is noticeably worse than the previous years results, where only a $7m loss was recorded.

On the stock markets, Amazon dropped sharply following the news, losing 5 per cent of its value. However, it has traditionally been valued for its revenue growth over its profits, and investors are aware that its strengths lie in the holiday season of Q4.

Amazons accompanying statement remained positive, with a focus on innovations made in the past months and improved customer experience, although the new Fire phone was barely mentioned, beyond noting that since its launch, “the rate of app submissions to the Amazon Appstore has more than doubled.”

“We continue working hard on making the Amazon customer experience better and better,” said Jeff Bezos, founder and CEO of Amazon.com. “Weve recently introduced Sunday delivery coverage to 25 per cent of the US population, launched European cross-border Two-Day Delivery for Prime, launched Prime Music with over one million songs, created three original kids TV series, added world-class parental controls to Fire TV with FreeTime, and launched Kindle Unlimited.”

The company expects revenues of between $19.7bn and $21.5bn in Q3, with operating loss of somewhere between $810m and $410m, substantially higher than 2013s $25m operating loss in Q3.