Amazon’s sales increase 22pc, but company reports loss of US$7m

26 Jul 2013

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Amazon’s second-quarter results are in with lower-than-expected sales and a net loss of US$7m for the quarter.

Net sales were up 22pc to US$15.7bn in Q2 2013, from US$12.83bn in Q2 2012, which was lower than analysts’ forecast of US$15.732bn. Operating income dropped by 26pc to US$79m in the second quarter, from US$107m in 2012.

The company reported a net loss of US$7m, while last year’s Q2 results amounted to a net income of the same. The figure is disappointing, considering analysts expected a net income of US$28.3m, however, founder and CEO Jeff Bezos did not address these missed expectations and simply focused on the company’s strong points.

“We’re so grateful to our customers for their response to Kindle devices and our digital ecosystem. This past quarter, our top 10 selling items worldwide were all digital products – Kindles, Kindle Fire HDs, accessories and digital content,” he said.

Bezos went on to discuss the growth of the Kindle service, with the Kindle Store now stocking millions of titles, including more than 350,000 exclusives, whiles Amazon’s video-on-demand service Prime Instant Video has surpassed 41,000 titles.

Deals secured with Viacom, NBC Universal Cable & New Media Distribution and PBS Distribution have all helped to bring a wide range of films and TV shows to Prime Instant Video, which is available only in the US. Amazon also branched out into original programming, commissioning a number of TV pilots in a contest where viewers would decide what series would go into further production. As a result, new shows Alpha House, Betas and kids’ shows Annebots, Creative Galaxy and Tumbleaf will reach the service later this year and in early 2014.

Amazon’s Appstore has also been made available in almost 200 countries, while the Kindle Fire HD and Kindle Fire HD 8.9-inch are now available in more than 170 countries and territories.

But, for its next round of financial results, Amazon is still expecting to wind up in the red with an operating loss of somewhere between US$65m and US$440m forecast. The company also expects net sales of between US$15.35bn and US$17.5bn in Q3 2013, which would represent year-on-year growth of 12-24pc.

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Elaine Burke is managing editor of Siliconrepublic.com

editorial@siliconrepublic.com