Amazon Posts $274 Million Loss in 3Q

SEATTLE-Rising expenses offset significant gains in sales and margins to turn Amazon.com's ink to red in its third quarter.

The Internet site reported a net loss of $274 in the quarter, which ended on Sept. 30, after net income from last year's third quarter of $63 million. Operating expenses jumped 42.2 percent in dollars in the quarter, and gained 273 basis points as a percentage of sales to 25.5 percent. The rise in operating costs included significant gains in expenses for fulfillment, marketing, technology and content, and general and administrative.

Net sales in the quarter rose 26.9 percent to $13.8 billion. This performance included an impressive gain of 33 percent in North American sales, plus a 20 percent rise in international sales. Gross margin increased 180 basis points to 25.3 percent.

Jeff Bezos, Amazon.com's founder and CEO, focused on the company's sales performance in his comments on the third quarter. "Our approach is to work hard to charge less," Bezos said. "Sell devices near break-even, and you can pack a lot of sophisticated hardware into a very low price point. And our approach is working...."

HFN Staff | News & Commentary

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