The Osteoboost wearable uses vibrations to keep bones strong and prevent osteoporosisRead more...
Amazon reports $274M net loss, points the finger at LivingSocial
Holy moly, Amazon. Analysts didn’t have high hopes for this quarter, but they weren’t expecting the bloodbath that they got. Amazon released its Q3 earnings Thursday, in which the company reported a net income loss of $274 million, or 60 cents a share on revenue of $13.81 billion. Analysts were expecting a loss, but they assumed it would be a fraction of that—just 8 cents a share on revenue of $13.9 billion.
This is compared to a net income of $63 million or 14 cents a share on $10.9 billion in revenue in Q3 2011.
This marks the first quarter in which Amazon has reported a net loss since 2003.
The company didn’t waste time in pointing the finger at LivingSocial:
“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,” the report reads.
If not for the drag from LivingSocial, Amazon would’ve reported a loss of 23 cents a share, which is still substantially higher than the Street was expecting.
Additionally, free cash flow fell 31% to $1.06 billion from $1.5 billion.
The quarterly results are surprising, given the fact that Amazon just unveiled a new line of Kindle Fires and the new Paperwhite Kindle this year. The new Kindle Fire HD is 40% faster than the iPad due to its dual antenna Wi-Fi. But CEO Jeff Bezos recently admitted that Amazon sells the Kindle Fire devices at more or less breakeven prices.
“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 Bezos, in a statement. “And our approach is working – the $199 Kindle Fire HD is the #1 bestselling product across Amazon worldwide.”
The number two and three spots are occupied by the Kindle Paperwhite and the $69 Kindle. The number four bestselling product is, naturally, book three of the Fifty Shades of Grey series (which is the worst book in the series, in my opinion…call it BDSM burnout).
Amazon will begin shipping is 8.9-inch Kindle Fire tablet November 20.
Amazon shares were down 1.3% in after-hours trading to $220. This time last month, shares were trading at more than $250.
Image source: triplem.com.au
Support VatorNews by Donating
Read more from our "Trends and news" series
Proscia Ready helps life sciences organizations and diagnostic laboratories adopt digital pathologyRead more...
The company builds tools specifically for the over 50% of US adults who have at a chronic conditionRead more...