Amazon May Lose Hundreds of Millions, but Things Are Improving
Amazon just announced another quarter of tiny profits, and says it may lose up to $340 million this quarter. But things are still looking up for the giant online retailer.
Amazon just announced another quarter of tiny profits, and says it may lose up to $340 million this quarter. But things are still looking up for the giant online retailer.
Amazon just released its fourth-quarter earnings report, announcing it had racked up $21.27 billion in sales -- an increase of 22% from a year earlier. But for all those billions in sales, it managed just $97 million in profits.
Earnings missed analysts' estimates and disappointed the investment community. That's OK by Amazon. The online giant is an iconoclast in the retail sector: a public company that acts like a private firm, more concerned with long-term growth and taking risks than appeasing the folks on Wall Street every quarter.
Amazon's spending on expansion will eventually help its bottom line, but right now it's costing the online retailer on Wall Street. The company's third-quarter net income fell 73 percent despite revenue growth as Amazon built sales fulfillment centers at a rapid clip. Neither that drop nor its revenue outlook for the current quarter made investors happy.
Shares of the Barnes and Noble rose nearly 15% last week, after the bookseller posted healthy growth for its Nook e-reader. But the quarter itself was a mess: The company posted a steep loss, and non-digital sales fell by 11%. If only there were a company with a stronger e-book business that could run an online store profitably...
The online retail giant functions like two stocks: One is speculative and volatile, with unusually high valuations -- and high demands for returns. The other is for long-term investors, who get rewarded for buying and holding with capital gains and consistent growth.




