Amazon's Revenue Soars, but No Profit in Sight
SAN FRANCISCO - Amazon lost money in the third quarter, as expected. But its revenue soared, as always.
Revenue was $17.09 billion, up from $13.81 billion in the third quarter of 2012. That was a little better than Wall Street had predicted and at the very top of the company's own forecast, which estimated that sales would increase between 12 percent and 24 percent.
Analysts had expected a loss of 9 cents a share, and that is what they got. A year ago, the company lost 60 cents a share, much of it related to an ill-fared investment in Living Social, a daily deals site.
The company's recipe of investing heavily to build up capacity and selling cheaply to stoke revenue has won wide favor with investors. Amazon shares, which closed up modestly during ordinary trading, jumped again in after-hours trading. The stock has increased 32 percent this year.
'Amazon is the teacher's pet of Wall Street,' said Sucharita Mulpuru, an analyst with Forrester. 'There is no other company in the entire world that has the consistently abominable rate of profitability they do and yet has the stratospheric valuation they do.'
Amazon has about 100 fulfillment centers - what in the old economy were called warehouses. That is double the number it had a few years ago. It has streamlined the process of opening these centers, but it is still a tremendous expense.
The retailer said this week that it will open new fulfillment centers in Hillsborough County and Lakeland, Fla., each of them more than 1 million square feet. The former will handle large items like kayaks and televisions; the latter will process smaller items such as books and consumer goods. The company also announced it would build a 1 million-square-foot fulfillment center in Baltimore.
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