Send to KindleToday Amazon released its numbers for the second quarter of this year. Some of the numbers are up, but some really important ones are down.
In short, revenues (sales) were up, but net income (profits) was down. That’s been Amazon’s position for the past several quarters (this is the sixth in a row), too, as the company invests heavily in building new warehouses and acquiring smaller companies. Profits were a surprisingly small; they decreased 96% to $7 million (only $7 million!) in the second quarter, compared with $191 million in profits in the second quarter of 2011.
As for sales, they were up. As the company said in its press release:
Net sales increased 29% to $12.83 billion in the second quarter, compared with $9.91 billion in second quarter 2011. Excluding the $272 millionunfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales would have grown 32% compared with second quarter 2011.
So Amazon is selling more stuff but pocketing less as it focuses on expansion. The company has added 30 new distribution center warehouses in the past 2 years and has plans on adding 13 more this year.
Amazon founder and CEO Jeff Bezos has often said that his company is focused on long term health and profitability, and that investors interested in quarter-after-quarter returns should not invest in Amazon. And things won’t be better next quarter, either. Amazon also said in its press release that its operating income for the third quarter of 2012 will be a loss of between $50 million and $350 million.
Amazon’s profits have been in a steep nosedive for a while now, and it will be really interesting to see how/if/when the company is able to pull out of it. I have faith in Bezos, but I’m sure some people with a vested interest in Amazon are squirming a bit. Let’s hope all those warehouses pay off.
You can read more about Amazon’s quarter in the press release.
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