Amazon: stack 'em high, sell 'em low, lose money

26 Jul 2013
Amazon Kindle Fire

Amazon posts a $7m loss on booming revenues of more than $15bn

Amazon has announced a quarterly loss of $7m, despite a huge boost in revenue.

The monolithic online retailer saw revenue climb to $15.7bn for the quarter, an increase of 22% on the same quarter last year. But investment in new fulfilment centres and acquiring digital rights saw the company once again dip into the red.

Amazon has never delivered huge profit margins. This time last year the company only posted a slim profit of $7m on revenue of $12.7bn. The company spent much of its early life making heavy losses as it focused on expanding its range at the expense of short-term profits.

But with the company now closing in on its 20th birthday, investors' patience may begin to wear thin if profit margins don't begin to show signs of improvement. The company's stock fell by almost 2% in after-hours trading after the results were announced.

Amazon CEO Jeff Bezos made no reference to the loss in a statement accompanying the earnings, instead focusing on the new revenue streams the company is developing.

"We’re so grateful to our customers for their response to Kindle devices and our digital ecosystem," Bezos said. "This past quarter, our top 10 selling items worldwide were all digital products – Kindles, Kindle Fire HDs, accessories and digital content."

That digital content will soon include Amazon's own roster of television shows, as it attempts to take on rivals such as Netflix. The company has five full series in the works, including two comedy programmes and three children's shows. They will be shown exclusively on Amazon Prime Instant Video next year.

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