Amazon posts 3Q results below expectations
NEW YORK (AP) — Amazon reported third-quarter results below Wall Street's expectations on Thursday — including a large loss, weighed by its stake in online deals service LivingSocial and continued spending on its Kindle business and distribution centers.
Though expected, it was Amazon's first loss since July 2003.
The world's largest online retailer posted a loss of $274 million, or 60 cents per share, in the July-September period. That's down from earnings of $63 million, or 14 cents per share, a year earlier.
The latest quarter's results include a loss of 37 cents per share related to Amazon's minority stake in LivingSocial. Without this charge, it still would have lost 23 cents per share, worse than what analysts were expecting.
Revenue grew 27 percent to $13.81 billion, from $10.88 billion, falling short of analysts' expectations.
Analysts surveyed by FactSet, on average, were expecting a loss of 7 cents per share on revenue of $13.91 billion.
Beyond LivingSocial, Chief Financial Officer Tom Szkutak attributed the quarter's loss to Amazon's heavy investments in its Kindle e-reader and tablet business, as well as in new geographic locations such as China and in video content. Amazon is also spending money on centers for fulfilling orders. It said this month that it's hiring 50,000 temporary workers at its distribution centers across the U.S. during the holiday season.
The quarter's operating expenses rose 28 percent to $13.8 billion from $10.8 billion.
Amazon.com Inc. said its $199 Kindle Fire HD tablet is its best-selling product worldwide, but as usual, it did not give specific sales figures.
"Our approach is to work hard to charge less. Sell devices near breakeven and you can pack a lot of sophisticated hardware into a very low price point," founder and CEO Jeff Bezos said in a statement.
Amazon has a larger version of the Kindle Fire HD out next month.
Amazon's results come two days after Apple Inc. introduced a smaller iPad, the Mini, for $329. In its press release announcing the results, Amazon included a list trumpeting its high-definition Kindle Fires as cheaper than the iPad Mini and with more features. However, Apple's iPad has a much wider selection of third-party apps.
For the current quarter, which includes the important holiday shopping period, Amazon forecast revenue of $20.25 billion to $22.75 billion. Analysts were expecting a bit more at $22.82 billion.
Seattle-based Amazon's stock was down $1.94 to $220.98 in after-hours trading after initially falling sharply, to as low as $204.17. The stock closed down $5.57, or 2.4 percent, at $222.92 in the regular trading session.