Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Thu Oct 25 2012 16:10:46

Amazon Reports 27 Percent Increase in Sales for Q3

By: Ina Steiner

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Amazon's conference call with analysts is at 5:00 pm EST today, here is the company's press release announcing third quarter 2012 earnings, you can view the full release with tables on Amazon's Investor Relations website.

Amazon.com Announces Third Quarter Sales up 27% to $13.81 Billion
Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its third quarter ended September 30, 2012.

Operating cash flow increased 8% to $3.37 billion for the trailing twelve months, compared with $3.11 billion for the trailing twelve months ended September 30, 2011. Free cash flow decreased 31% to $1.06 billion for the trailing twelve months, compared with $1.53 billion for the trailing twelve months ended September 30, 2011.

Common shares outstanding plus shares underlying stock-based awards totaled 469 million on September 30, 2012, consistent with 469 million one year ago.

Net sales increased 27% to $13.81 billion in the third quarter, compared with $10.88 billion in third quarter 2011. Excluding the $348 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales grew 30% compared with third quarter 2011.

Operating loss was $28 million in the third quarter, compared with operating income of $79 million in third quarter 2011. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating loss was $3 million.

Net loss was $274 million in the third quarter, or $0.60 per diluted share, compared with net income of $63 million, or $0.14 per diluted share, in third quarter 2011. The third quarter 2012 includes a loss of $169 million, or $0.37 per diluted share, related to our equity-method share of the losses reported by LivingSocial, primarily attributable to its impairment charge of certain assets, including goodwill.

"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," said Jeff Bezos, founder and CEO of Amazon.com. "And our approach is working – the $199 Kindle Fire HD is the #1 bestselling product across Amazon worldwide. Incredibly, this is true even as measured by unit sales. The next two bestselling products worldwide are our Kindle Paperwhite and our $69 Kindle. We're selling more of each of these devices than the #4 bestselling product, book three of the Fifty Shades of Grey series. And we haven't even started shipping our best tablet – the $299 Kindle Fire HD 8.9" ships November 20."

Highlights

    Compared to the iPad mini, Kindle Fire HD 8.9" has:

        193% more pixels (2,304,000 pixels vs. 786,432 pixels)
        56% more pixels-per-inch (254 vs. 163)
        Watch HD movies and TV – cannot on iPad mini (iPad mini is an SD device)
        Better audio with dual stereo speakers and Dolby Digital Plus
        Wi-Fi with dual band, dual antennas + MIMO
        Costs $30 less

    Compared to the iPad mini, Kindle Fire HD 7" has:

        30% more pixels (1,024,000 vs. 786,432 pixels)
        33% more pixels per inch (216 vs. 163)
        Watch HD movies and TV – cannot on iPad mini (iPad mini is an SD device)
        Better audio with dual stereo speakers and Dolby Digital Plus
        Wi-Fi with dual band, dual antennas + MIMO
        Costs $130 less

    Amazon.com introduced the fifth generation Kindle e-readers: Kindle Paperwhite is the most advanced e-reader ever constructed with 62% more pixels and 25% increased contrast, a patented built-in front light for reading in all lighting conditions, up to 8 weeks of battery life, and a thin and light design for just $119; Kindle Paperwhite Wi-Fi + 3G — never pay for or hunt for a Wi-Fi hotspot with the all-new top-of-the-line Kindle e-reader with free 3G wireless for just $179; and the new latest generation Kindle, the lightest and smallest Kindle, now with new, improved fonts, faster page turns for just $69.

    Amazon.co.jp launched the Japanese Kindle Store, offering customers a vast selection of over 50,000 Japanese-language Kindle books. In total, the store offers over one million titles, including the largest selection of bestsellers in English and other languages.

    Amazon.com announced a new licensing agreement with EPIX for movies including The Avengers, Iron Man 2, The Hunger Games, Super 8, Thor, and more, expanding its catalog of title offerings for Prime Instant Video to more than 30,000 movies and TV episodes.

    Amazon announced significant updates to Cloud Player, including scan and match technology which provides customers a fast and easy way to get all of their music from their computers to the cloud. Cloud Player customers can then enjoy their music on their favorite devices, including Kindle Fire, iPhone, iPod Touch, Android devices, Sonos home entertainment systems, and any web browser. Amazon also expanded Cloud Player to the U.K., Germany, France, Italy, and Spain.

    Amazon announced it is hiring for more than 50,000 seasonal positions at its fulfillment centers across the U.S. this holiday season. Amazon employs more than 20,000 people across its 40 U.S. fulfillment centers and pays its full-time, permanent employees 30 percent more than what traditional retail store employees earn.

    Amazon has announced 19 new fulfillment centers worldwide to be opened in time to support this year's holiday demand.

    North America segment sales, representing amounts earned from retail sales of consumer products (including from sellers) and subscriptions through North America-focused websites, and including amounts earned from Amazon Web Services (AWS), were $7.88 billion, up 33% from third quarter 2011.

    International segment sales, representing amounts earned from retail sales of consumer products (including from sellers) and subscriptions through internationally-focused websites, were $5.92 billion, up 20% from third quarter 2011. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 27%.

    Worldwide Media sales grew 11% to $4.60 billion. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 14%.

    Worldwide Electronics and Other General Merchandise sales grew 36% to $8.56 billion. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 39%.

    The NASDAQ OMX Group announced the launch of FinQloud, a cloud computing offering powered by AWS and exclusively designed for the financial services industry. FinQloud provides efficient management and storage of financial data to help market participants streamline operations and meet regulatory compliance requirements without making costly capital expenditures for their underlying infrastructure.

    AWS announced that more than 300 government agencies and 1,500 education institutions are leveraging AWS for a wide range of uses including big data analytics, high performance computing, web and collaboration applications, archiving and storage, and disaster relief. AWS also announced new services and features available in the AWS GovCloud (U.S.) Region, including the addition of high performance computing capabilities.

    AWS announced Amazon Glacier, a secure, reliable and extremely low cost storage service designed for data archiving and backup. Amazon Glacier is designed for data that is infrequently accessed, yet still important to retain for future reference, and for which retrieval times of several hours are suitable.

Financial Guidance
The following forward-looking statements reflect Amazon.com's expectations as of October 25, 2012. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and consumer spending, world events, the rate of growth of the Internet and online commerce and the various factors detailed below.

Fourth Quarter 2012 Guidance
    Net sales are expected to be between $20.25 billion and $22.75 billion, or to grow between 16% and 31% compared with fourth quarter 2011.

    Operating income (loss) is expected to be between $(490) million and $310 million, compared with $260 million in the prior year period.

    This guidance includes approximately $290 million for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional business acquisitions, investments or legal settlements are concluded and that there are no further revisions to stock-based compensation estimates.

A conference call will be webcast live today at 2 p.m. PT/5 p.m. ET, and will be available for at least three months at www.amazon.com/ir. This call will contain forward-looking statements and other material information regarding the Company's financial and operating results.

See Friday's EcommerceBytes news story for information about Amazon's Q3 earnings call with analysts.




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Perminate Link for Amazon Reports 27 Percent Increase in Sales for Q3   Amazon Reports 27 Percent Increase in Sales for Q3

by: Massachusets Howler This user has validated their user name.

Thu Oct 25 17:48:15 2012

Amazon and Jeff Bezos BUILD while JD and ebay DECIEVE (and HARVEST).
Mass Howler

Perminate Link for Amazon Reports 27 Percent Increase in Sales for Q3   Amazon Reports 27 Percent Increase in Sales for Q3

This user has validated their user name. by: Ric

Thu Oct 25 17:58:28 2012

27% sales increase without revenue shifting to appease Wall Street.

27% Sales increase without manipulating sellers to include shipping costs to artificially increase sales to appease Wall Street.

Wall Street appears pretty impressed with genuine sales growth as opposed to the artificially inflated numbers eBay reports.

27% Sales increase with virtually no system changes.

27 % Sales increase with no need to invent a search engine that limits buyer choices.

27% Sales increase without changing search result pages.

27% Sales increase without changing view item pages.

Kudos to Amazon who does not find it necessary to constantly make changes for the sake of making changes.

They avoid confusing buyers, they avoid alienating sellers, they just go about the business of completing transactions without all the destructive innovations eBay seems to believe is so necessary.

All the MBA's ( Masters of Business Assassination) at eBay and they can not generate genuine transactional growth.

eBay's Board needs to take note of the collective negative effect all John Donahoe's constant changes have had on the marketplace and call for a moratorium.

eBay could generate this kind of growth if only they were not so hell bent on changing things every few months.

Perminate Link for Amazon Reports 27 Percent Increase in Sales for Q3   Amazon Reports 27 Percent Increase in Sales for Q3

This user has validated their user name. by: Spartacus

Thu Oct 25 18:28:15 2012

Once again, Ric, you've nailed it.

You can add...

27% sales increase without listing fees

27% sales increase without slapping advertising on listing pages sellers paid fees for

27% sales increase without incessant banter about mobile

27% sales increase without Paypal

Perminate Link for Amazon Reports 27 Percent Increase in Sales for Q3   Amazon Reports 27 Percent Increase in Sales for Q3

by: Digmen1 This user has validated their user name.
Web Site

Thu Oct 25 20:32:26 2012

A great increase in sales.
But what is the Operating Loss ?
What is the point of having great sales if you are making an operating loss ?

Perminate Link for Amazon Reports 27 Percent Increase in Sales for Q3   Amazon Reports 27 Percent Increase in Sales for Q3

by: Patricia This user has validated their user name.

Thu Oct 25 21:14:24 2012

I don't particularly care about the extra pixels!  I look for stability.  I have the Kindle Fire and don't like it.  the keyboard is either too sensitive or not sensitive enough depending on what keys you're hitting.  I get really angry when I click on a link and it just sits them dumbly - click - nothing - click - nothing!!!!!  Try to get on a busy website, such as Huffington Post and you can't get around!  Its maddening.  I should have saved up and gotten an iPad.  Its not my Kindle either...I already complained about the original one I got and Amazon replaced it.  I'm afraid these are little more than a toy!

Perminate Link for Amazon Reports 27 Percent Increase in Sales for Q3   Amazon Reports 27 Percent Increase in Sales for Q3

This user has validated their user name. by: Philip Cohen
Web Site

Thu Oct 25 21:19:01 2012

@Digmen1, You can criticise Amazon's performance all you like but the smart money on Wall Street recognises which company has a future; take a look at the current shares prices, both of which were ~$40 five years ago ...

Not even the paid eBay analysts/shills can alter the fact of the difference in the two share prices ...

eBay / PayPal / Donahoe: Dead Men Walking

Perminate Link for Amazon Reports 27 Percent Increase in Sales for Q3   Amazon Reports 27 Percent Increase in Sales for Q3

by: JB This user has validated their user name.

Thu Oct 25 23:23:57 2012

eBay must be in a Heep load of hurt to not cancel this auction, and actually make revenue off of $780,000, for one unique auction....Time must be getting tough for eBay. I wonder if JD bid on this auction....

http://newsone.com/2066873/virginity-on-ebay/

Perminate Link for Amazon Reports 27 Percent Increase in Sales for Q3   Amazon Reports 27 Percent Increase in Sales for Q3

by: pace306 This user has validated their user name.

Thu Oct 25 23:43:34 2012

Amazon continues to do the right thing, time and time again. eBay continues to do the wrong thing over and over again.

Putting aside all of eBays financial irregularities - its simply as the above posts state - ebays continued insistance to get involved in every part of YOUR business.

Every time eBay touches something - they screw it up, BIG TIME.

That lady who is suing eBay will probably get nowhere on most of her charges - but there are parts of what she says (not the spyware) that is true.

eBay has simply become your unasked for business parter. Like in the movies with the mob - you are in your store selling your stuff and they come by, break things, then tell you to pay up or 1) you will have no customes (seller visibility) and 2) they will continue to break your windows, damage your reputation(DSRs), and put you out of business.

All I want to do is sell, yet eBay puts stumbling blocks in front of me at every turn.

Leave my pictures alone, make your cheap azz customers pay for things (im SO tired of the unpaid buyer crap), stop forcing me to take back returns, and stop unleashing VERO on me - if you have the balls - come sue me - I guarandamntee you will loose.

Amazon isnt perfect by far, but they try hard for parity, they are generally fair on most issues and they mostly stay out of your way when you are trying to sell.

This trend will continue till one day Wall Street wakes up.

Perminate Link for Amazon Reports 27 Percent Increase in Sales for Q3   Amazon Reports 27 Percent Increase in Sales for Q3

This user has validated their user name. by: eBankrupted

Fri Oct 26 00:53:22 2012

Amazon invested all the growth into verticle expansion. The foundation is now in place, and Q4 will show the profit margin on steroids, with the more than doubling of the workforce with 50,000 seasonal on top of 20,000 regular workers. By nearly tripling the workforce; Amazon seems poised to take a bite out of eBay's plate.

So Amazon looks lean and mean and ready to flex capital muscle to swallow eBay. By moving some profits into the future, the company can buy stock back at 6% less now, then sell it big after Q4.

EBay seems to be doing the opposite; starving it's organic core seller base for 2 months so the seller purchasing power is weak going into Q4, because eBay took it's profit in Q3. (Hence that huge sucking sound we all heard in low sales from July-Sept).

Q4 will be a quantum leap for Amazon, and a small step for eBay. Bet on it.

Perminate Link for Amazon Reports 27 Percent Increase in Sales for Q3   Amazon Reports 27 Percent Increase in Sales for Q3

by: JoJo This user has validated their user name.

Fri Oct 26 10:45:29 2012

Amazon is not perfect, but the platform works and works very well.  And they do try hard for fairness which is far more than ebay ever does.

Perminate Link for Amazon Reports 27 Percent Increase in Sales for Q3   Amazon Reports 27 Percent Increase in Sales for Q3

by: Digmen1 This user has validated their user name.
Web Site

Fri Oct 26 16:43:39 2012

Amazon are great at what they do, they only make incremental changes.
But they do encourage a race to the bottom on prices.
And what/why was their Operating Loss?

Perminate Link for Amazon Reports 27 Percent Increase in Sales for Q3   Amazon Reports 27 Percent Increase in Sales for Q3

by: Patricia This user has validated their user name.

Sat Oct 27 10:54:12 2012

Should Amazon ever buy out Ebay we can kiss auctions good bye.  Amazon had them years ago - I used to list auctions there....they would surely discontinue that part of the company if they ever do buy Ebay out.

Perminate Link for Amazon Reports 27 Percent Increase in Sales for Q3   Amazon Reports 27 Percent Increase in Sales for Q3

by: Digmen1 This user has validated their user name.
Web Site

Sun Oct 28 15:05:37 2012

Jeff Bezos said that their loss this quarter was due to writing off Living Social, currency movements and gains by the big malls.



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