Amazon Discloses Third Quarter Earnings

The third quarter earnings are announced by Amazon today suggesting the company could not be able to achieve the expected targets. The company saw a decrease of 73% in net income in the third quarter to stand at $63 million compared to last year’s net income of $231 million. Similarly, it has $0.14 per diluted share for this quarter compared to $0.51 per diluted share in the same quarter last year. The company failed to meet the Wall Street expected targets, i.e. analysts expected a profit of $0.25 per share on $10.91 billion in revenue.

However, net sale of the e-commerce giant increased by 44% to reach $10.88 billion, which was $7.56 billion for the same quarter last year. Compared to $268 million of last year, the company managed to have an operating income of $79 million.

Jeff Bezos, the founder and CEO of Amazon said in one of his statement that for Kindle, the September 28th, when the company’s Kindle Fire and other devices were made available for order, was the biggest order day ever as it beaten the previous holiday peak seasons records as well. He said, “In the three weeks since launch, orders for electronic ink Kindles are double the previous launch. 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.”

Let us have a look at company’s North American segment and International segment sales. The former comprises Amazon’s United States and Canadian sites, which had sales of $5.93 billion, 44% up from the same quarter of previous year. The International segment represents U.K., German, Japanese, French, Chinese, Italian and Spanish sites had showed $4.94 billion sales also 44% up over previous year. The Worldwide Media sales increased by 24% to reach at $4.15 billion, while Worldwide Electronics and other General Merchandise sales remained at $6.32 billion with growth of 59% over last year.

Currently, the e-commerce giant has $2.8 billion in ready money on hand.

Analysts have set new targets for Amazon for the fourth quarter earnings. According to analysts, the net income of the company is expected to grow between 27% and 44%, i.e. it will remain between $16.45 billion and $18.65 billion. Operating income is expected to be somewhere between $200 million loss and $250 million gain, i.e. somewhere between 142% decline and 47% decline over the fourth quarter of last year.

In September, Amazon released its new Kindle tablet, the Kindle Fire for $199 together with Kindle for $79, Kindle Touch for $99 and Kindle Touch 3G for $149. Kindle appears to be the best selling product for Amazon until now, but Amazon for some unknown reasons has not yet released any official details about the sales figures for its new products.

There are reports suggesting that Amazon is signing deals with CBS, NBC and Fox with an aim to flourish its Prime movie streaming business.

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