Amazon keeps increasing its sales, but can't turn a profit; earnings draw mixed response
Amazon reported a quarterly loss of $0.02 cents per share on Thursday despite generating more than $15 billion in revenue.
The company increased second quarter sales 22 percent compared the same period last year, and its share price has stabilized after initially falling in after-hours trading.
Though it adds new users and generates more sales each year, it regularly posts profit margins of less than one percent. This has long been the wrap on the company.
Analysts expected Amazon to report earnings per share of $0.06, but the company ended up at $0.02, as the rise in costs outmatched the rise in sales.
So what should you make of this? Nobody really agrees. Here's a small sample of instant responses from assorted technology-focused publications:
This is where it's real articles-of-faith time for Amazon investors. You must believe that Amazon is & will be an inevitable retail monster.
— The Verge's Tim Carmody (@tcarmody) July 25, 2013
Amazon’s growth at all costs strategy keeps working, huge sales growth and negative profits: http://t.co/3voK1wL2MA
— Slate's Matt Yglesias (@mattyglesias) July 25, 2013
Amazon sales up 22% in Q2 but surprise loss sends stock reeling http://t.co/JRoGCDTsin
— CNET (@CNET) July 25, 2013
— AllThingsD (@allthingsd) July 25, 2013
— VentureBeat (@VentureBeat) July 25, 2013
Or you can look at what CEO Jeff Bezos said, which didn't comment on the numbers at all:
"We’re so grateful to our customers for their response to Kindle devices and our digital ecosystem. Kindles, Kindle Fire HDs, accessories and digital content.
"The Kindle service keeps getting better. The Kindle Store now offers millions of titles including more than 350,000 exclusives that you won’t find anywhere else. Prime Instant Video has surpassed 40,000 titles, including many premium exclusives like Downton Abbey and Under the Dome.
"And we’ve added more than a thousand books, games, educational apps, movies and TV shows to Kindle FreeTime Unlimited, bringing together in one place all the types of content kids and parents love.”