Amazon: Wow, look at this $17bn we made. Uh, oh wait, it's gone already
'Foreign exchange rates' blamed this time for $25m loss in Q3
Amazon has had another great quarter raking in huge revenues and, as usual, has reported a net loss as Bezos & Co poured the cash back into the company's business divisions.
The bookseller-turned-everything-seller said it racked up sales of $17.09bn for the third quarter of 2013, up a staggering 24 percent on the same period a year ago. This came in comfortably above the $16.76bn analysts had expected, and drove the company's shares up 7.5 per cent in after-hours trading.
As usual, the company failed to make a profit and reported an operating loss of $25m, compared with a net loss of $7m in the previous quarter. The company blamed this loss on an "unfavorable impact from year-over-year changes in foreign exchange rates."
In a canned statement Amazon chief exec Jeff Bezos summarized what his company has been up to in the past three months, and notably singled out Amazon Web Services's division's big contract win: building a cloud for CIA spies.
"It's been a busy few months – we launched a new Paperwhite and new Kindle Fires to positive reviews and surprised people with the revolutionary Mayday button—average Mayday response times are just 11 seconds!" Bezos said in a canned quote.
"And that’s not all. In the last 90 days, our AWS team got back to work on a big government contract."
Bezos also picked out 8 million square feet in new fulfillment centers; the deployment of Kiva robots to replace human workers add more warehouse automation capabilities; various initiatives by Amazon for authors and artists; and the hiring and training of some 70,000 new US employees for the punishing holiday season rush in the company's mammoth warehouses.
This laundry list of new projects, products, and schemes helps illustrate just why Amazon's shares perform so well when the internet giant reports so many losses: investors seem to think the company has room for expansion in many of its new markets, and for its part Amazon never shies away from entering a new industry and aggressively under-pricing the competition.
The Amazon Web Services division seems to be growing at a fast pace: the "other" category AWS is shoved into recorded whopping revenues of $1.011bn for the quarter compared with $648m a year ago.
This growth has been underpinned by a dramatic rise in capital expenditures that saw the company fork out $1.038bn in the quarter for purchases of property and equipment to build new data centers and fulfillment warehouses.
The company projected sales of between $23.5bn and $26.5bn for the fourth quarter of 2013, and warned of a potential operating loss of $500m or perhaps a profit of $500m. ®