Quarterly Loss Narrows For Amazon.com Inc. (NASDAQ:AMZN)
The 3Q13 earnings announcement was cheered by Amazon.com, Inc. (NASDAQ:AMZN)’s shareholders as the company posted better than expected 24% sales growth through aggressive expansion into the domestic and foreign markets. The company reported much of its growth in the domestic market where net sales jumped 31% to $10.3 billion while international sales accounted for 15% increase YoY and around 13% QoQ growth. The growth in home market was attributed to faster delivery through growing network of distribution or fulfillment centers which helped drove the consumer demand.
The company significantly narrowed the quarterly loss to $41 million for 3Q13 or $0.09 per share compared to net loss of $274 million during 3Q12 or $0.6 per share.The revenue performance for the third quarter indicated better momentum of the world’s leading online retailer. Amazon.com posted almost 24% growths in its 3Q13 revenue at $17.1 billion compared to $13.8 billion in the 3Q12. The most startling indicator of the company’s financial release was the profit margins of 27.6% which was in line with analysts’ expectations. However as the company ramps up investments towards preparation of the crucial holiday season, the margins remained lower than the preceding quarter.
The 2013 U.S. holiday season is anticipated to be the slowest in past many years. The rival online retailer eBay Inc. (NASDAQ:EBAY) recently announced disappointing holiday forecast with consideration to the U.S. economic environment and in part, the U.S. government shutdown which had deteriorated the consumer confidence.
Amazon.com is spending billions of dollars for its expansion plans with investment to strengthen distribution abroad as well as on buying and creating content for the Instant Video service and expanding free streaming video is helping attract Prime members. Prime is $79 a year, two day shipping service which also offers free video streaming.
Amazon Prime with $79 a year or $6.59 per month subscription fees, compares with Netflix, Inc. (NASDAQ:NFLX)’s $7.99 monthly subscription charges. While the Netflix succeeded to add many more subscribers during 3Q13, there isn’t much data available on even what percentage of Prime crowd even uses the instant unlimited viewing of over 40,000 movies and television shows.