Amazon builds sales, but losses pile up
- 24 October, 2014 09:11
Amazon.com continued to increase its sales last quarter but losses also mounted, to the growing consternation of investors.
Amazon's overall sales were up 20 per cent in the third quarter, amounting to $US20.58 billion for the three months ended September 30, the company said.
At the same time, however, Amazon's losses reached $US437 million, compared to a loss of $US41 million in the same period last year.
That led investors to push its share price lower. Amazon's shares were selling for $US278.00 at the time of this report, down 11 per cent from the close of regular trading.
CEO Jeff Bezos has long argued that investing for growth is the right strategy for Amazon. The company made a big acquisition this year, picking up the gaming site Twitch for almost $US1 billion, and it has released new tablets at a rapid clip.
Just hours before it released its earnings report, Amazon updated its Kindle Voyage book reader, making it lighter and faster. The Kindle Fire tablet got an update recently, and the company released a new version of that product for kids. Its game studio launched a slew of updated titles for the Fire tablet, including "Til Morning's Light," "CreepStorm," and "Tales From Deep Space."
In a move to tap into the growing mobile payments industry, Amazon launched Local Register, a mobile app and credit card reader. It also ventured into three-dimensional printing with an online marketplace that initially has about 200 schematics for printing online objects. Along with testing drones for product delivery, they are signs that Amazon is investing to secure its position in the future. The question is how patient its investors will be while the losses pile up.
Amazon doesn't break out figures for Amazon Web Services, though it claimed "usage growth" of close to 90 per cent from a year earlier.