10/25/12

Amazon grows in Q3, but not as fast

The biggest online retailer ended the quarter with a $244 million loss.

Mark Brohan , Research Director

For investors and observers used to seeing truly big jumps in sales for Amazon.com Inc. each quarter, earnings for the third quarter were a little more down to earth. The biggest online retailer also continues to spend heavily on acquisitions and growing its infrastructure and ended the quarter with a loss.

Contributing to the loss was a write-off of part of Amazon’s stake in LivingSocial, the Groupon competitor that e-mails discount offers to consumers.

For the third quarter ended Sept. 30, Amazon, No. 1 in the 2012 Internet Retailer Top 500, reported:

While many retailers would relish a 27% increase in global sales and a 33% in North American sales, those were smaller increases than Amazon has reported in recent quarters. In the second quarter, Amazon reported a 36% increase in North American sales and 29% growth globally; in the first quarter, growth of 36% and 34%; and in the fourth quarter of 2011 sales increases of 43% and 41%.

“Our approach is to work hard to charge less,” CEO Jeff Bezos says. “Sell devices near breakeven and you can pack a lot of sophisticated hardware into a very low price point." While Amazon devoted a good part of its earnings press release to touting the advantages of its Kindle Fire HD tablet to Apple Inc.’s iPad, the e-retailer does not break out sales of its Kindle devices.

For the first three quarters, Amazon reported:

For the fourth quarter Amazon expects sales to range from $20.25 billion to $22.75 billion and operating income to range from a profit of $310 million to a loss of $490 million.

Topics:

Amazon, e-commerce investment, Jeff Bezos, Kindle, LivingSocial, Q3 financials, Top 500, web-only retailers

NEWS CATEGORIES Back to Top...