Black and White Program

Amazon.com Inc reports positive quarterly results

July 28th, 2012 by Black and White Program Staff

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San Francisco based Amazon.com Inc reported positive quarterly results on Thursday, indicating growth and profit margins. Second-quarter revenue for the world’s largest internet retailer was $12.83 billion, up 29 percent from a year earlier. Separating out their <strong>product revenue</strong>, (its traditional online retail business), revenue grew 25 percent to $10.79 billion while <strong>services revenue</strong>, (online marketplace for third-party merchants and cloud computing business Amazon Web Services), spiked 57 percent to $2.04 billion. Analysts reported that Amazon’s gross profit margin was 26.1 percent in the second quarter, up from 24.1 percent a year earlier.

It’s important to note that the newer businesses (Service revenue) are out-profiting their traditional business, and a high growth rate also exists, providing a road map for what direction the company may head in the upcoming quarters, with regards to allocated spending, resources, etc. The company reported that net income was $7 million, or one cent per share, versus $191 million, or 41 cents a share, a year earlier.

Company forecasts include third-quarter revenue of $12.9 billion to $14.3 billion, a third-quarter operating loss of $50 million to $350 million. Excluding stock-based compensation and other items, the forecast was between a loss of $75 million and a profit of $225 million.  Some analysts reported that Amazon’s significant spending on infrastructure items, to support its new and growing businesses and meet capacity demands, has been higher than expected.

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