This is a better article on Amazon's latest financial report.
http://www.bloomberg.com/news/2014-0...-services.html
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Amazon is in an investment cycle that benefits customers and will eventually end, said Szkutak, without specifying when that will be.
“We have a tremendous amount of opportunity,” he said. While it’s impacting short-term results, he said “we’ll obviously be looking to get great returns on invested capital.”
Looking ahead, Amazon projected sales of $19.7 billion to $21.5 billion for the current quarter. Operating losses are projected to be $810 million to $410 million, Amazon said.
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The world’s largest online retailer had a second-quarter loss of $126 million, wider than analysts’ $66.7 million average estimate and a $7 million loss a year earlier. Sales climbed 23 percent to $19.3 billion, while operating expenses increased 24 percent to $19.4 billion, Amazon said in a statement today.
Chief Executive Officer Jeff Bezos’s strategy since Amazon’s inception has been to invest heavily to expand and earn customer loyalty. While the approach has disrupted industries from bookstores and electronics outlets to providers of Web-computing software, it’s been expensive. Amazon began posting quarterly losses in 2012 after being consistently profitable for almost a decade.
“As long as there is money to pour into the business, they will be pouring money into the business,” said Sucharita Mulpuru, an analyst at Forrester Research in Cambridge, Massachusetts. “If you can spend down all your profit and nobody is going to penalize you for it, why show a profit?”
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