Amazon.com posted another hefty loss in its most recent quarter on a large year on year increase in turnover. For the second-quarter, Amazon reported a net loss of $115.7 million on $577.9 million in sales, compared with a loss of $82.8 million on $314.4 million during the year ago quarter.
Amazon executives chose to focus on what they saw as strong growth, rather than yet another loss. When looked at that way, Amazon’s year on year revenue grew an impressive 84%. “Few businesses are able to turn in that kind of year-over-year growth figure,” said Jeff Bezos, chief executive officer, in a conference call.
Looked at a different way, however, growth over the preceding quarter was miniscule, less than $4 million. Shares of Amazon fell $1.56 to $36.06 the day the results were announced.
Amazon’s fortunes have sunk considerably in recent months. Its share price has tumbled and analysts are downgrading their ratings on its stock. The latest to downgrade is Lehman Brothers, which dropped Amazon stock from a ‘buy’ to a ‘neutral’ rating following the latest earnings report.
Amazon also lost a key executive recently when Joseph Galli, president and chief operating officer, left to take over VerticalNet, a business to business marketplace provider. Amazon’s debt has now risen to $2 billion, according to its balance sheets.
A few months ago, these types of developments wouldn’t have mattered. But amidst a general cooling towards New Economy stocks, Amazon’s continuing losses have subjected its share price to a beating.
Will business to consumer Internet plays ever make a profit? Let us know what you think at: abceditorial@imh.it. Your comments may be published in arabian-business.com.
