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Amazon slumps after missing expectations (profit falls 73%!)
Reuters ^ | 10-25-11 | Staff

Posted on 10/25/2011 2:51:00 PM PDT by library user

Oct 25 (Reuters) - Amazon.com Inc shares slumped after reporting weaker-than-expected results as it spent heavily on a new tablet computer and other long-term projects.

The stock plummeted 14 percent to $194.31 after hours, after closing at $227.15 on Nasdaq.

The world's largest Internet retailer said on Tuesday its third-quarter net income was $63 million, or 14 cents a share, versus $231 million, or 51 cents a share, a year earlier. Revenue was $10.88 billion, up 44 percent from the third quarter of 2010, it added.

Analysts had expected Amazon to report third-quarter earnings per share of 24 cents on revenue of $10.95 billion, according to Thomson Reuters I/B/E/S.

"Lower profit margins would be acceptable, but for the lower-than-expected revenue growth numbers," said Fred Moran, an analyst at The Benchmark Co.

(Excerpt) Read more at reuters.com ...


TOPICS: Business/Economy; News/Current Events
KEYWORDS: amazon; antibizprez; default; economy; obama; spending; taxinatorcain
I don't blame this big of a hit on long-term projects, like the author claims. I think it's the economy. What say you? Maybe someone who's more in-the-know can confirm or deny my assumption.
1 posted on 10/25/2011 2:51:15 PM PDT by library user
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To: library user

I think they thought that everyone was going to jump onto Amazon Prime when Netflix screwed up. It didn’t happen.


2 posted on 10/25/2011 2:54:06 PM PDT by netmilsmom (Happiness is a choice)
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To: library user

People don’t -have- to buy books, or any other product Amazon offers. Savings are now exhausted for many. Non-essentials are taking a hit, as the blight continues. IMO.


3 posted on 10/25/2011 2:55:12 PM PDT by Psalm 144 (Voodoo Republicans: Don't read their lips - watch their hands.)
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To: netmilsmom

Netflix ain’t doing well either. They lost 800,000 customers recently. Biggest customer loss since 2004. And Netflix stock was down 35% today alone.


4 posted on 10/25/2011 2:57:24 PM PDT by library user (I want my headstone to read: "He died while doing what he enjoyed most: breathing.")
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To: library user

I’ve certainly done my part as a patriotic consumer. If I don’t see a big brown truck in my driveway at least once a week, I get pretty snippy.


5 posted on 10/25/2011 2:58:43 PM PDT by Leroy S. Mort
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To: library user

It’s partially the iPad effect. The price of ebooks had to be slashed this summer as books began being bought on more tablets, and the readers had to be made into a product more competitive with the iPad.


6 posted on 10/25/2011 2:59:43 PM PDT by Goldsborough
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To: library user

Amazon is more of a general merchandise retailer than bookseller any more. Their torrid growth is slowing as they get bigger. So, I tend to agree with you, the results likely reflect the economy.


7 posted on 10/25/2011 3:00:40 PM PDT by colorado tanker
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To: library user

As a person that sells used books on Amazon, I can tell you that market has tanked big time.


8 posted on 10/25/2011 3:03:14 PM PDT by ReformedBeckite (1 of 3 I'm only allowing my self each day)
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To: colorado tanker
Also, don't discount the various sales tax collection battles Amazon is involved in nationwide. As a tactic, they cut off their affiliate program in California for a time this year and that couldn't have helped the bottom line.

Efforts to turn Amazon into a tax collector also effectively raise a barrier to sales as the online discount cost advantage is blunted, reducing impulse purchases.
9 posted on 10/25/2011 3:08:03 PM PDT by Goldsborough
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To: Leroy S. Mort
I'm shopping more then ever with Amazon. With Prime it's cheaper then wasting the gas to town and sales tax. UPS is at my house at least three times a week.
10 posted on 10/25/2011 3:09:57 PM PDT by ladyvet ( I would rather have Incitatus then the asses that are in congress today.)
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To: netmilsmom
When I say Amazon Prime wanted to charge $1 to see an old episode of shows like Adam 12 or Dragnet, I wrote it off as useless, and never went back to it.
11 posted on 10/25/2011 3:11:05 PM PDT by Mark was here (It's either Obama or America. There cannot be both.)
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To: ladyvet

I ordered 2 Kindle Fire’s for my 10 and 8 year old for Christmas.

If I like it, I’ll get one for me too!


12 posted on 10/25/2011 3:20:06 PM PDT by mom4melody
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To: library user
I know I'm buying fewer books thanks to the unusual, for me, absence of income this year.

ML/NJ

13 posted on 10/25/2011 3:29:17 PM PDT by ml/nj
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To: Mark was here

Wow, is that how much they charge? It would be a hair cheaper per episode to just buy the dvd-sets. Which, is actually, what I tend to do.


14 posted on 10/25/2011 3:36:53 PM PDT by greene66
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To: library user

I think it’s the economy as well. A lot of people are finally realizing that they need to tighten their belts. Don’t think it was a surprise that Netflix lost customers either.


15 posted on 10/25/2011 3:38:41 PM PDT by af_vet_rr
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Remember How You Felt Before Finding FR?

Click The Pic To Donate

16 posted on 10/25/2011 3:58:57 PM PDT by DJ MacWoW (America! The wolves are here! What will you do?)
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To: colorado tanker

For sure.
I got front shocks for my Caddy cheaper there than I could find anywhere else, and they were the same OEM part manufactured by ZF Sachs.


17 posted on 10/25/2011 4:08:28 PM PDT by nascarnation (DEFEAT BARAQ 2012 DEPORT BARAQ 2013)
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To: library user

http://www.amazon.com/Mountain-Three-Short-Sleeve-Medium/dp/B000NZW3J8/ref=sr_1_2?s=apparel&ie=UTF8&qid=1319584767&sr=1-2

Even if you don’t buy anything, the product reviews can be hilarious.


18 posted on 10/25/2011 4:27:27 PM PDT by Snickering Hound
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To: Leroy S. Mort
If I don’t see a big brown truck in my driveway at least once a week, I get pretty snippy.

Now thats funny.

19 posted on 10/25/2011 4:35:20 PM PDT by blasater1960 (Deut 30, Psalm 111...the Torah and the Law, is attainable past, present and forever.)
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To: library user
I had a friend who worked at a large multi-national. He explained to me that when a corporation doesn't quite meet its "projected" profit targets, it is commonly called a "loss", as in "we lost a lot of money last year"; whereas, in actual fact, they made gobs of profit.

I guess the only way to sort it out is to examine the annual report; but, then again, I equate reading those to a quiet Sunday afternoon with the comics section..... offsetting obscene liabilities with tubs of "goodwill" is always good for a chuckle.

20 posted on 10/25/2011 4:41:08 PM PDT by CanaGuy (P.M. Steven Harper: We gave you a majority, now get busy!)
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To: library user
Still at $194/share. Not too shabby.

Amazon is outstanding from my perspective.

21 posted on 10/25/2011 5:14:49 PM PDT by Loyal Buckeye
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To: Leroy S. Mort

“I’ve certainly done my part as a patriotic consumer. If I don’t see a big brown truck in my driveway at least once a week, I get pretty snippy.”

That sounds like my house recently!

I told them the other day I was helping them keep their jobs, they agreed.

I just can’t pass up all the great bargains on things I know I will use, especially when I can find a 20-30% off coupon code on top of the sale!


22 posted on 10/25/2011 5:29:07 PM PDT by kcvl
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To: library user

These days I even buy razor blades on Amazon. I always look for items with free shipping on orders over $25.


23 posted on 10/25/2011 5:41:24 PM PDT by TChad
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To: CanaGuy
I had a friend who worked at a large multi-national. He explained to me that when a corporation doesn't quite meet its "projected" profit targets, it is commonly called a "loss", as in "we lost a lot of money last year"; whereas, in actual fact, they made gobs of profit.

Here's the truth. "Independent" analysts are supposed to project a company's earnings (i.e. profits) per share but the truth is they call the company and say "c'mon, I know you're not allowed to tell anybody but you know me, we're buds! what are you guys thinking?" Then the company tells the analyst, who writes his report accordingly.

The issue comes if they don't meet those targets, for two reasons. First, they make the analyst and all the talking heads who parrot their advice look really dumb and that cannot be forgiven. Second, the number came from them! What do you mean you can't meet it?! Don't talk to me about the gobs of money you made, you said you'd make gobs of money plus a little more and you didn't! Don't you even know what's happening in your own company?! Holy smokes, I better sell!

So the stock gets punished.

24 posted on 10/25/2011 5:56:37 PM PDT by pepsi_junkie (Who is John Galt?)
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To: TChad

My daughter’s in college, so she set up her own Amazon account and got free Prime for a year. I occasionally ask her to order something if I want it quick or can’t find $25 worth of stuff.

I pretty much have a steady stream of items coming to my door. We received several items today, and I have two orders in process.


25 posted on 10/25/2011 5:57:17 PM PDT by CharlesWayneCT
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To: Leroy S. Mort

I bet you love to track those packages too!


26 posted on 10/25/2011 6:08:24 PM PDT by stayathomemom (Beware of kittens modifying your posts.)
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To: library user

States taxing internet sales?


27 posted on 10/25/2011 6:13:43 PM PDT by Betis70 (Bruins!)
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To: stayathomemom
I bet you love to track those packages too!

You bet! And I always check woot.com at 1 am Eastern and slickdeals.net at least four times a day. Three more weeks and I'll have all my Christmas shopping done.

28 posted on 10/25/2011 7:12:06 PM PDT by Leroy S. Mort (Stop me, before I shop again...)
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To: library user
I think shareholders are very fickle. They panic everytime the quarterly report falls short of expectations - even if the company still makes a bundle of money.

I have Amazon.com stock and plan to keep it for the long haul. I said 10 years ago they were going to be bigger than Wal-mart someday and they are still on track to do that.

29 posted on 10/25/2011 7:20:17 PM PDT by SamAdams76 (Herman Cain 2012)
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To: netmilsmom
I think they thought that everyone was going to jump onto Amazon Prime

Prime is a great shipping deal, but the video is fairly limited. There's too much competition from Netflix, Hulu, Crackle, Epix, and all the other online streaming video sites. There's only so much time to spend watching a small rectangular screen, while life goes on and bills stack up. Amazon should stick to what it's good at--things people want, shipped fast and free.

30 posted on 10/25/2011 7:32:16 PM PDT by giotto
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To: library user

Really hoping Amazon doesn’t go out of business, would be a disaster for me


31 posted on 10/26/2011 4:25:26 AM PDT by Mount Athos (A Giant luxury mega-mansion for Gore, a Government Green EcoShack made of poo for you)
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