Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Thu Oct 22 2015 16:23:53

Amazon Releases Third Quarter 2015 Earnings

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 2015 earnings, you can view the full release with tables on Amazon's investor relations website.

Amazon.com Announces Third Quarter Sales up 23% to $25.4 Billion
Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results for its third quarter ended September 30, 2015.

Operating cash flow increased 72% to $9.8 billion for the trailing twelve months, compared with $5.7 billion for the trailing twelve months ended September 30, 2014. Free cash flow increased to $5.4 billion for the trailing twelve months, compared with $1.1 billion for the trailing twelve months ended September 30, 2014. Additional measures of free cash flow can be found in the “Supplemental Financial Information and Business Metrics.”

Common shares outstanding plus shares underlying stock-based awards totaled 489 million on September 30, 2015, compared with 481 million one year ago.

Net sales increased 23% to $25.4 billion in the third quarter, compared with $20.6 billion in third quarter 2014. Excluding the $1.3 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 30% compared to third quarter 2014.

Operating income was $406 million in the third quarter, compared with operating loss of $544 million in third quarter 2014.

Net income was $79 million in the third quarter, or $0.17 per diluted share, compared with net loss of $437 million, or $0.95 per diluted share, in third quarter 2014.

“For the first time, we’re recommending you bring home a six-pack for the whole family,” said Jeff Bezos, founder and CEO of Amazon.com. “At a price of $50 for one or $250 for a six-pack, Fire sets a new bar for what customers should expect from a low-cost tablet. This is one more step in our mission to bring customers premium products at non-premium prices. Fire is the #1 best-selling product on Amazon.com since launch, and based on the strength of the customer response, we are building millions more than we’d already planned.”

Highlights

Amazon introduced four new tablets, including Fire, which has the best display on any tablet under $50 and is also available for an even lower price when purchased in a six-pack; Fire HD, the incredibly thin and light 8” and 10.1” tablets designed from the ground up for entertainment; and Fire Kids Edition, a tablet built for kids and their parents — now under $100.

Amazon introduced three new Fire TV devices, all with Alexa integration. The new Fire TV is 75% more powerful and has the best-in-class Wi-Fi and 4K Ultra HD — and is still less than $100. The new Fire TV Stick with Voice Remote adds voice search — and costs less than $50. Fire TV Gaming Edition combines the new Fire TV, new game controller, a 32GB microSD card, and two games — Shovel Knight and Disney’s DuckTales — all for under $140.

Amazon launched Fire TV and Fire TV Stick for Japanese customers, which provides easy, instant access to Prime Video, Amazon Video, Hulu, GYAO!, Netflix, YouTube.com, Niconico, Video Market, and more. In addition to the device, Amazon launched Prime Video on Amazon.co.jp, exclusively for Prime members, with thousands of popular Japanese and U.S. movies and TV shows, anime series, music concerts, and variety shows, plus Amazon’s own award-winning originals.

Alexa, the brain behind Echo, continues to get smarter with new features including support for shared Google calendars, integration of additional connected home devices from SmartThings and Insteon, NCAA football scores and schedules, and more.

Amazon announced new investments from the $100 million Alexa Fund, including Petnet, the creator of the SmartFeeder, an app-enabled intelligent feeding appliance; Musaic, a high-resolution wireless HiFi system that combines home automation to create a connected smart home; and Rachio, maker of a smart sprinkler controller that helps customers intelligently water their yards.

Amazon Dash Button has received an overwhelmingly positive customer response and selection continues to grow; customers can now choose from over 500 products from 29 popular brands. Dash Replenishment Service (DRS) now includes 15 device makers, such as General Electric, Samsung, and Oster. The first DRS-enabled devices are expected to ship later this year.

Amazon announced Amazon Underground, a new app for Android phones that includes the same functionality of the Amazon mobile shopping app plus over ten thousand dollars’ worth of apps, games, and in-app items, for free.

Amazon Studios’ critically-acclaimed series, Transparent, won five Emmys, including Jeffrey Tambor’s award for Outstanding Lead Actor in a Comedy Series and Jill Soloway’s award for Outstanding Directing for a Comedy Series.

Amazon announced an agreement with Jeremy Clarkson, Richard Hammond, James May, and the trio’s longtime executive producer, Andy Wilman, to make a new car show exclusively for Prime members worldwide. The award-winning team has committed to three seasons.

Amazon Studios recently debuted new original series Red Oaks, Hand of God, and Wishenpoof, with more content coming soon, including the much anticipated The Man in the High Castle and season two of Transparent and Tumble Leaf. In addition, Amazon has announced 12 pilots that are scheduled to debut later this year.

Amazon.co.uk launched Prime Music, giving U.K. Prime members over one million songs and hundreds of playlists to stream and download for free.

Prime Music expanded its catalog in the U.S. and U.K. with the addition of artists from Universal Music Group, including Katy Perry, Lana Del Rey, Lady Gaga, The Weeknd, Of Monsters and Men, Ellie Goulding, and many more award-winning popular and legendary artists.

Prime Now added eight metro areas in the past quarter. Prime members can now choose from tens of thousands of daily essentials with free two-hour and paid one-hour delivery in 17 locations around the world.

Amazon launched Amazon Pantry in Japan and Germany. Amazon Pantry offers Prime members a different way to shop, allowing them to purchase daily essentials in everyday sizes and have items delivered for a low, flat-rate fee per Amazon Pantry box.

Amazon introduced Handmade at Amazon, featuring genuinely handcrafted products sold directly from artisans around the world.

Customers in both the U.K. and France rated Amazon as their top retailer based on separate surveys conducted by Havas and OC&C Strategy Consultants.

Amazon continues to expand its international categories with the launch of the Business, Industrial and Scientific Supplies store for Japan, U.K., Germany, France, Italy, and Spain with hundreds of thousands of items available for businesses. Additionally, Amazon launched Grocery for Italy, France, and Spain with thousands of food products and household essentials from local producers and international brands.

Amazon expects to create over 100,000 seasonal positions in North America, and over 40,000 across its European Fulfillment Network this holiday season. Last year, Amazon converted tens of thousands of temporary employees into regular, full-time roles, and expects to do the same this year.

Since the fulfillment center tour program launched last year, over 26,000 people have visited one of the 18 facilities where tours are offered worldwide.

Launched in late June, Amazon.com.mx has expanded selection to 32 million items, added three new categories, started offering monthly installments for select purchases, and expanded delivery on weekends and holidays to over 70% of zip codes in Mexico City.

Amazon.in continues to be India’s largest store with over 30 million products, having added an average of over 40,000 products a day so far in 2015.

In the past year, the number of sellers on the Amazon.in platform has increased more than 250%, and nearly 90% of Indian sellers are using Amazon’s logistics and warehousing services. To serve this growing storage need, Amazon.in has nearly tripled its fulfillment capacity year-over-year.

In the third quarter, active customers on Amazon.in grew over 230% year-over-year.

So far, Amazon.in’s 2015 Diwali season is our largest ever, with daily sales of approximately 4x the prior year.

Amazon launched Kindle Unlimited on Amazon.in with over one million titles for 199 rupees a month, less than the average price of a single print book.

Amazon Web Services (AWS) hosted re:Invent, its fourth annual customer and partner conference, with more than 19,000 attendees and 38,000 streaming participants.

Accenture and AWS announced the formation of the Accenture AWS Business Group, a team of dedicated professionals from both Accenture and AWS that will help enterprise customers more easily migrate their existing applications and build new applications for the AWS Cloud.

AWS introduced Amazon QuickSight, a very fast, cloud-powered business intelligence (BI) service that makes it easy for all employees, regardless of their technical skill, to build visualizations, perform ad-hoc analysis, and quickly get business insights from their data at 1/10th the cost of traditional solutions. QuickSight integrates automatically with AWS data services and uses a new, Super-fast, Parallel, In-memory Calculation Engine (“SPICE”) to perform advanced calculations, render visualizations rapidly, and scale to hundreds of thousands of users.

AWS launched new capabilities to make it faster, easier, and more cost-effective to move data from on-premises into the AWS Cloud. AWS Snowball is a petabyte-scale data transport appliance that can securely transfer 50 TB of data per appliance into and out of AWS for as little as 1/5th the cost of high-speed Internet. Amazon Kinesis Firehose is a fully-managed service that captures streaming data from hundreds of thousands of different sources and automatically loads it into Amazon S3 or Amazon Redshift for near real-time data analysis.

AWS announced new database tools and services that make it easier for enterprises to bring databases to AWS and break free from the cost and complexity of traditional commercial databases. The AWS Database Migration Service monitors the progress of database migrations, notifying customers of any issues and automatically provisioning a host replacement in the event of a failure. The AWS Schema Conversion Tool ports database schemas and stored procedures from one database platform to another, so customers can move their applications from Oracle and SQL Server to Amazon Aurora, MySQL, MariaDB, and soon PostgreSQL. In the first week after AWS re:Invent, more than 1,000 customers have signed up to use AWS’s new Database Migration Service.

In just four months since becoming generally available in July, Amazon Aurora has become the fastest-growing service in the history of AWS.

AWS launched AWS IoT, a managed cloud platform that lets billions of connected devices — such as mobile phones, cars, factory floors, aircraft engines, sensor grids, and more — easily and securely interact with cloud applications and other devices. AWS IoT can support trillions of messages, and can process, route, and keep track of those messages to AWS endpoints and to other devices reliably and securely, even when the devices aren’t connected.

AWS announced three new services and capabilities to make it easier for enterprises to build and manage secure, compliant applications on the AWS Cloud: Amazon Inspector is a service that automatically assesses how well customers’ applications follow security best practices and provides a detailed report to help fix any vulnerabilities found; AWS Config Rules is a new set of cloud governance capabilities that allow IT Administrators to define guidelines for provisioning and configuring AWS resources and then continuously monitor compliance with those guidelines; and AWS WAF is a web application firewall that protects applications from common web exploits by giving customers control over which traffic to allow or block to their web applications by defining customizable web security rules.

Financial Guidance

The following forward-looking statements reflect Amazon.com’s expectations as of October 22, 2015, and are subject to substantial uncertainty. 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 customer spending, world events, the rate of growth of the Internet and online commerce, and the various factors detailed below.

Fourth Quarter 2015 Guidance

Net sales are expected to be between $33.50 billion and $36.75 billion, or to grow between 14% and 25% compared with fourth quarter 2014.
Operating income is expected to be between $80 million and $1.28 billion, compared to $591 million in fourth quarter 2014.

This guidance includes approximately $620 million for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional business acquisitions, investments, restructurings, 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 2:00 p.m. PT/5:00 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.




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by: The FACE of Amazon This user has validated their user name.
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Thu Oct 22 16:51:31 2015

Amazon's financial results look good, but they won't be sustainable in the future unless Amazon fixes its management problems because they have hired and promoted far too many incompetent managers who drive "success" only through the abuse of its hard working employees. That's why Jay Carney and Jeff Bezos are still worried about the NY Times article two months later. More details here: https://sites.google.com/site/thefaceofamazon

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This user has validated their user name. by: iheartjacksparrow

Thu Oct 22 18:19:28 2015

Amazon shares are now at $623.50 while eBay shares are at $27.52. Ouch!  

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This user has validated their user name. by: toolguy

Thu Oct 22 20:05:03 2015

Big bad Amazon had a net profit of $79 million for the 3rd quarter.

Little tiny eBay had a net profit of $525 million for the 3rd quarter.

I will say Wall Street loves Amazon and hates eBay, I just wonder why?

eBay makes more MONEY!

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by: Bloggo This user has validated their user name.

Thu Oct 22 20:23:26 2015

Amazon loses money on most everything it does. In it’s 20 years of existence, it’s rarely posted a profit. Why does Wall Street love it anyway? There’s a term for it, “Irrational exuberance”.

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by: Frank Abagnale This user has validated their user name.

Thu Oct 22 20:32:47 2015

Let's hope Amazon loses more money so their stock price can go even higher!

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This user has validated their user name. by: iheartjacksparrow

Thu Oct 22 21:18:17 2015

toolguy enthusiastically writes: "Big bad Amazon had a net profit of $79 million for the 3rd quarter. Little tiny eBay had a net profit of $525 million for the 3rd quarter."

Unfortunately, you are reporting the figures that are net income, not net profit. Also, net revenue for eBay is $2.09 billion, while Amazon had $25.36 billion in revenue.

I admit that I know less than zero about finances and financial reports, but it sounds, to me at least, than Amazon is doing better.

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This user has validated their user name. by: toolguy

Fri Oct 23 02:24:58 2015

@iheartjacksparrow

Amazon stock is doing better then eBay stock but eBay makes way more money then Amazon does.

Amazon has only made money a few years vs eBay has been profitable since day one!

And stock price has nothing to do with a companies value.

It's market cap!

And yes, Amazon is worth way more then eBay is.

But eBay makes the money!

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This user has validated their user name. by: Marie

Fri Oct 23 02:43:20 2015

Where Amazon really beats Ebay is with this statement "In the third quarter, active customers on Amazon.in grew over 230% year-over-year."  Ebay comes nowhere near that percentage.

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by: pace306 This user has validated their user name.

Fri Oct 23 08:03:20 2015

Tool -  while I have no love for Amazon - its quite obvious that theres more then just the numbers here.

1) Amazon sells things, eBay does NOTHING except produce hot air

2) Amazon has a HUGE customer base for its web based services, eBay has ... more hot air

3) Amazon owns at least 6 (probably close to 10) other retail sites, ebay has  ... sold off most of what it had and is left with 1/2.com

4) Amazon makes things - fire stick, fire tablet, fire phone - they are innovators. Some items are popular, some fail - eBay makes ..... nothing

5) Amazon realizes that %43 of their sales are 3p sellers. Jeff Bezos NEVER said that those %43 are cray baby children aka the noise like eBays CEO said.

Do you get my point?

Yes Amazon looses money aka doesnt MAKE as much money - but thats because that money is constantly being reinvested into the company - new wharehouses, people, freight systems, robots and more.

eBays only investment(s) are for 3rd rate CEOs who ruin the company.

Theres NO COMPARISON when a 3p seller posts an item on eBay vs Amazon. On Amazon you can sell HUNDREDS of something in a day - on eBay that could be a YEAR for the same amount - the traffic rates are no where close.

THAT is why Wall St loves Amazon and THAT is why they dislike eBay.

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This user has validated their user name. by: toolguy

Fri Oct 23 09:27:13 2015

@pace306

Do you sell more on eBay or Amazon?

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by: FREDDY This user has validated their user name.

Fri Oct 23 09:38:39 2015

What I find amazing is that the stock prices of ebay and Amazon are not even in the same park.  They were pretty much equal at one time. Amazon just kept building more and more. Where ebay did just the opposite.
Amazon may be getting too big so they don't have the time to be fair to the 3rd party sellers. All robot decisions. The 3rd party sellers will continue to join.


As far as what the numbers look like, they are what the CEO want them to be. Only an outside audit using the SAME math would you get a fair comparison.

For some strange and weird reason is the fact that ebay had something going. Made a ton of money, went public etc etc.. Everybody loved ebay. Then they said let's change a good thing. I wonder if they set out to destroy ebay just to see how much money they can grab before it goes completely down???? Almost like a game where they get paid to destroy.

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This user has validated their user name. by: RKTOYS

Fri Oct 23 13:00:22 2015

Disagree with number four.  Those are commodity products that Amazon contracts out and slaps their logo on.

But I do agree that it looks like Amazon reinvests whereas eBay just loots.  For whatever else it may be, building a warehouse is at least a visible capital expenditure.  In contrast, eBay's site is a mess and every announcement from them is ''pay us more for X because we're not doing Y'' or rearranging the UI on barely-functional pages.

I recently went to leave feedback for a customer and got a stupid error message like ''problem happened.''  So I went looking and found two other slightly different ways to leave feedback.  The first said the item didn't exist (wrong) or I already left feedback (wrong).  The second said the item didn't exist (wrong) or I missed the 60-day deadline (right).

As a programmer, that drives me up the wall.  You have three different ways to leave feedback?  One returns a useless error message and the other two can't differentiate between missing listings, duplicate feedback, expired deadlines, or something else?

You know the reason I even tried to set feedback three different ways?  Because some time ago I had a preorder pulled down two days before my stock came in.  Because the listing was ''gone'' (not really), eBay wouldn't let me add a tracking number.  But guess what, PayPal did and it propagated right over to eBay's system.  So it absolutely would not surprise me if every single page made different function calls just because.

It really doesn't matter how much they rearrange the UI if their developers can't do something as simple as using a consistent API to report correct information.

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This user has validated their user name. by: Marie

Fri Oct 23 13:11:16 2015

Some are not comparing apples to apples.  To compare stock prices, you also need to consider how many shares each company has issued.

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This user has validated their user name. by: Rexford

Fri Oct 23 13:17:12 2015

I can not even believe someone would assert that eBay even compares to Amazon. It's like comparing a snow pea to Jupiter.  Amazon is what eBay wants to be.

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This user has validated their user name. by: iheartjacksparrow

Fri Oct 23 15:08:23 2015

@Rexford - Awesome analogy. Though with toolguy selling on eBay, that should raise its stature to at least grapefruit to Jupiter.

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This user has validated their user name. by: iheartjacksparrow

Fri Oct 23 17:44:31 2015

eBay: Still the Same Old Story

http://seekingalpha.com/article/3592276-ebay-still-the-sa
me-old-story?auth_param=16gf2q:1b2k58r:140aed7382721cd733e7ce47b67c16a6&uprof=82&dr=1

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by: Donkey This user has validated their user name.

Fri Oct 23 21:17:39 2015

Ebay shows ads that take ebay buyers off of ebay to spend their money somewhere else.

Until ebay stops this, the only way they can go is down.

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by: pace306 This user has validated their user name.

Sat Oct 24 21:44:42 2015

Tool - Amazon - and with less hassles too

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

Mon Oct 26 02:53:57 2015

Well I sell a lot on Amazon and zero on ebay since I won't touch ebay with a ten foot pole.

I LOVE the Kindle unlimited program and I'm sure the lose money on me.

I tried the Kindle Fire 7" for me and hubby and both went back. Mine not working right and even the "HUGE" fonts on it weren't big enough for hubby to read anything on it. The only odd thing about this was they were shipped via USPS as was the extra flash cards they recommended for them. They allowed me free pickup from UPS for the Kindles, I assume because they one was broken. The flash cards at $14.99/piece shipped free with Prime, they wanted me to ship them back via UPS pick up also and pay almost $16 for the privilege for a package that should have been able to ship via 1st class for 4oz. In other words for about $2+. No way was I going to pay $16 to return them and there was no option other than UPS offered. Something I just may have a chat with CSR this week.

I buy a lot on Amazon, rarely return anything. And the more I am stuck at home due to poor health, the more I will shop there. In my mind there is no comparison between Amazon and ANY other company on line.  

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by: Jester This user has validated their user name.

Mon Oct 26 08:09:04 2015

Amazon for the longest time made little or no profit because it is in a huge growth mode. It is constantly building new facilities to expand its empire. With over 50 facilities in the US and almost 50 more worldwide including several in China and Japan.

Reinvesting most of its profits won't last forever but they will be king of the online worldwide hill for a long time because of this practise while ebay will continue to shrink into obscurity unless they change their current business model completely.

Also stock price means very little except that it keeps small investors out and attracts bigger investors like hedge fund managers(who hold on to large chunks of stock for long periods of time), much like Apple had done or Berkshire Hathaway but not that extreme. What matters is market cap for size 280.80 Billion for AZ and eBay at 34.31 Billion is dwarfed by Amazon at 8 times the market cap size. Price per earning is also telling with AZ stock price showing much room for increase growth while ebay's P/E shows it is over valued at it's current price.

Ebay's revenues/sales fell this quarter compared to last years 3rd quarter while Amazons increased 23%

I see ebay's stock going much lower and challenging the $20 level by this summer. AZ'stock is getting a little top heavy also but will continue to grow till march/april and then pull back hard in the summer till November with the whole market pulling back just before the elections and then after that the market will rise greatly. Just my 2 cents because that's all its worth.

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