Amazon slumps after missing expectations (profit falls 73%!)

Reuters ^ | 10-25-11 | Staff

[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.

[library user]

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.

[netmilsmom]

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

[Psalm 144]

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.

[library user]

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.

[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.

[Goldsborough]

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.

[colorado tanker]

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.

[ReformedBeckite]

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

[Goldsborough]

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.

[ladyvet]

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.

[Mark was here]

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.

[mom4melody]

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!

[ml/nj]

I know I'm buying fewer books thanks to the unusual, for me, absence of income this year.

ML/NJ

[greene66]

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.

[af_vet_rr]

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.

[DJ MacWoW]

Remember How You Felt Before Finding FR?

Click The Pic To Donate

[nascarnation]

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.

[Snickering Hound]

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.

[blasater1960]

If I don’t see a big brown truck in my driveway at least once a week, I get pretty snippy.

Now thats funny.

[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.

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.