Feeds

Amazon’s shares slashed as profits drop 73%

Sales OK, but costs through the roof

Secure remote control for conventional and virtual desktops

Amazon’s share price dropped sharply after it reported overall profits have fallen 73 per cent year on year.

The third quarter of the year is traditionally the slowest for retailers, but the company reported that net sales rose 44 per cent from this time last year. However, the company is selling its Kindle hardware at a loss, and has also invested heavily in backend infrastructure this quarter, in particular new warehouses (and air conditioners El Reg hopes.)

Other areas of investment for the company include setting up new Amazon Web Services (AWS) features, such as its virtual private cloud systems and the hardened AWS GovCloud service designed to win federal business. Presumably a fair amount of funds have also been spent strengthening its EC2 backbone after this year’s outages.

However, it is the company’s policy on the Kindle that has Wall Street most worried. Amazon is selling the Kindle Fire at $199, massively undercutting Apple’s iPad. As HP demonstrated with the TouchPad fiasco, there is strong consumer demand for low-cost tablets, but whether Amazon can make enough back in media sales to offset the low purchase price remains to be seen.

"In the three weeks since launch, orders for electronic ink Kindles are double the previous launch,” said Amazon’s CEO Jeff Bezos in a statement. “And based on what we're seeing with Kindle Fire pre-orders, we're increasing capacity and building millions more than we'd already planned."

Looking ahead, the company estimated its operating income next quarter would range between a loss of $200 million and a profit of $250 million, both well below last year’s figures. The fourth quarter is traditionally the strongest for retailers like Amazon, but the company is lowballing estimates of the quarter in advance, suggesting expected profits will not be good.

Beginner's guide to SSL certificates

Whitepapers

Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
5 critical considerations for enterprise cloud backup
Key considerations when evaluating cloud backup solutions to ensure adequate protection security and availability of enterprise data.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Getting ahead of the compliance curve
Learn about new services that make it easy to discover and manage certificates across the enterprise and how to get ahead of the compliance curve.