Amazon post the largest quarterly loss in 14 years

pwalker8 · 10-23-2014, 08:37 PM

http://online.wsj.com/articles/amazo...LEFTTopStories

It's a short article, so I can't post much of it, but here is a key paragraph

" Amazon.com Inc. ’s soaring ambitions are coming at a steep cost, dragging the e-commerce giant to its largest quarterly loss in 14 years.

A surge in spending on new-product development, music and video licensing, and other parts of the Seattle company’s expansion strategy led to a net loss of $437 million in the third quarter, worse than its year-earlier loss of $41 million. The wider loss came despite a 20% jump in revenue to $20.58 billion."

In addition, the article reports that Amazon took a $170 million charge on it's Amazon Fire smartphone which has been selling poorly.

Ouch. Amazon's stock prices fell 12% in after hours trading in reaction to the news. It's one thing to not show a profit after rolling the money back into the company, it's totally different to show that big of a loss.

I eagerly await to see all the usual suspects try to spin this into either a "not a big deal" or a "it's just a paper loss".

I suspect this new may have something to do with Amazon giving Hachette most of what it wanted.

tubemonkey · 10-23-2014, 08:42 PM

Amazon's not into making money. It's thing is to make customers like me happy.

ApK · 10-23-2014, 08:48 PM

Quote:

Originally Posted by pwalker8

I eagerly await to see all the usual suspects try to spin this into either a "not a big deal" or a "it's just a paper loss".

Oh, nooo, it's devastating. I hope Bezos doesn't have any sleeping pills and booze on hand tonight. I'm sure the mass layoffs will start any minute now. Perhaps we can all pick up some great discounts when they liquidate all their inventory trying to avoid bankrupcy.....

Quote:

I suspect this new may have something to do with Amazon giving Hachette most of what it wanted.

Really? I suspect it has something to do with aliens teleporting money out off all Bezos' secret cash vaults.
Let me offer as much supporting evidence and rationale as you do:

Quote:

. . .

ApK

ApK · 10-23-2014, 09:03 PM

BTW, why does the link seem to sometimes lead to a paywall and sometimes not?

TimW · 10-23-2014, 09:08 PM

Quote:

Originally Posted by pwalker8

http://online.wsj.com/articles/amazo...LEFTTopStories

I suspect this new may have something to do with Amazon giving Hachette most of what it wanted.

How can you tell? It's hard to hear much from Hachette through all the masonry when they started stonewalling. BTW, it's a rather tenuous connection between a quarterly report from Amazon "the everything store" and absolutely anything relevant to e-books...seeing as you posted it under "E-book General > News.

bgalbrecht · 10-23-2014, 09:47 PM

Quote:

Originally Posted by pwalker8

" Amazon.com Inc. ’s soaring ambitions are coming at a steep cost, dragging the e-commerce giant to its largest quarterly loss in 14 years.

A surge in spending on new-product development, music and video licensing, and other parts of the Seattle company’s expansion strategy led to a net loss of $437 million in the third quarter, worse than its year-earlier loss of $41 million. The wider loss came despite a 20% jump in revenue to $20.58 billion."

In addition, the article reports that Amazon took a $170 million charge on it's Amazon Fire smartphone which has been selling poorly.

Ouch. Amazon's stock prices fell 12% in after hours trading in reaction to the news. It's one thing to not show a profit after rolling the money back into the company, it's totally different to show that big of a loss.

I eagerly await to see all the usual suspects try to spin this into either a "not a big deal" or a "it's just a paper loss".

I suspect this new may have something to do with Amazon giving Hachette most of what it wanted.

Jeff Bezos has long been a believer in "I'll sell for a loss but I'll make up for it in volume!" Their first quarterly profit was 7 years after it was founded.

I don't see much of a problem with them taking a big quarterly loss for plowing large amounts of up-front money into new-product development, music and video licensing, as long as future quarters don't need that sort of expenditures. That hit for the Amazon smartphone must hurt, though.

Where do you get "Amazon giving Hachette most of what it wanted"? I haven't heard anything about them signing a contract, did you mean to say Simon & Schuster? The S&S deal was too recent for it to have any effect on last quarter's earnings, and I'm sure that the lack of a Hatchette deal wasn't affecting their earnings much either way.

rollei · 10-23-2014, 10:06 PM

They can make the money back if their smartphones starts to sell. Whether it sells or not is another question.

eschwartz · 10-23-2014, 10:28 PM

Quote:

Originally Posted by pwalker8

Ouch. Amazon's stock prices fell 12% in after hours trading in reaction to the news. It's one thing to not show a profit after rolling the money back into the company, it's totally different to show that big of a loss.

Please explain what the difference is between the usual claim "Amazon is losing money" and this. You seem to acknowledge that reinvesting in the business is not a loss, but then you say reinvesting this much is?

Sounds like the same claim you preempted and said was nonsense, except you are better because "there's a difference"?

Quote:

I suspect this new may have something to do with Amazon giving Hachette most of what it wanted.

As stated above, I think you mean S&S.
But you negected to mention that in addition to Amazon giving S&S what they want, S&S gave Amazon what they want...

This is a magical concept which exists in Fantasyland. It is called "compromise".
Hachette of course lives in the real world.

FizzyWater · 10-23-2014, 11:48 PM

I have to wonder if the higher-than-normal losses are due to the release of that cell phone and the TV box. Neither seems to be all that popular.

rcentros · 10-24-2014, 03:28 AM

Quote:

Originally Posted by pwalker8

http://online.wsj.com/articles/amazo...LEFTTopStories
...

A surge in spending on new-product development, music and video licensing, and other parts of the Seattle company’s expansion strategy led to a net loss of $437 million in the third quarter, worse than its year-earlier loss of $41 million. The wider loss came despite a 20% jump in revenue to $20.58 billion."

$20.5 Billion in quarterly revenue? Yeah, the sky is falling for Amazon.

Personally I'm happy that amazon plows its money into R&D. And I'll bet the stock comes back up within a month.

rcentros · 10-24-2014, 03:31 AM

Quote:

Originally Posted by FizzyWater

I have to wonder if the higher-than-normal losses are due to the release of that cell phone and the TV box. Neither seems to be all that popular.

And Microsoft seems to be surviving, even though they took a huge loss with their Surface tablets a couple quarters ago. Just more "ho hum."

pwalker8 · 10-24-2014, 10:21 AM

I see that I wasn't disappointed.

Plowing money back into the company is a good strategy for a growing company, but Amazon is a mature company now. Eventually, you have to show a profit. If you don't, then people stop investing in you. That's one reason that stock prices dropped.

DiapDealer · 10-24-2014, 10:33 AM

Yes. Your baiting was successful. How utterly surprising and wonderful for you.

tubemonkey · 10-24-2014, 10:42 AM

Quote:

Originally Posted by DiapDealer

Yes. Your baiting was successful. How utterly surprising and wonderful for you.

I fell for it

peterkobovox · 10-24-2014, 11:32 AM

I read the entire article and I also watch CNN and CNBC story about this topic. Obviously Amazon bet on smartphone is not showing good result so far, but in business one must explore new opportunities responsibly. If you don't invest how would you ever reap the benefit? Keep it up Bezo

Quote:

Originally Posted by rcentros

$20.5 Billion in quarterly revenue? Yeah, the sky is falling for Amazon.

Personally I'm happy that amazon plows its money into R&D. And I'll bet the stock comes back up within a month.

10-23-2014, 08:37 PM	#1
pwalker8 Grand Sorcerer Posts: 7,196 Karma: 70314280 Join Date: Dec 2006 Location: Atlanta, GA Device: iPad Pro, iPad mini, Kobo Aura, Amazon paperwhite, Sony PRS-T2	Amazon post the largest quarterly loss in 14 years http://online.wsj.com/articles/amazo...LEFTTopStories It's a short article, so I can't post much of it, but here is a key paragraph " Amazon.com Inc. ’s soaring ambitions are coming at a steep cost, dragging the e-commerce giant to its largest quarterly loss in 14 years. A surge in spending on new-product development, music and video licensing, and other parts of the Seattle company’s expansion strategy led to a net loss of $437 million in the third quarter, worse than its year-earlier loss of $41 million. The wider loss came despite a 20% jump in revenue to $20.58 billion." In addition, the article reports that Amazon took a $170 million charge on it's Amazon Fire smartphone which has been selling poorly. Ouch. Amazon's stock prices fell 12% in after hours trading in reaction to the news. It's one thing to not show a profit after rolling the money back into the company, it's totally different to show that big of a loss. I eagerly await to see all the usual suspects try to spin this into either a "not a big deal" or a "it's just a paper loss". I suspect this new may have something to do with Amazon giving Hachette most of what it wanted.

10-23-2014, 09:03 PM	#4
ApK Award-Winning Participant Posts: 7,389 Karma: 68329346 Join Date: Feb 2010 Location: NJ, USA Device: Kindle	BTW, why does the link seem to sometimes lead to a paywall and sometimes not? Last edited by ApK; 10-23-2014 at 09:05 PM.

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10-23-2014, 08:42 PM	#2
tubemonkey monkey on the fringe Posts: 45,762 Karma: 158733736 Join Date: May 2010 Location: Seattle Metro Device: Moto E6, Echo Show	Amazon's not into making money. It's thing is to make customers like me happy.

10-23-2014, 10:06 PM	#7
rollei Addict Posts: 219 Karma: 1000210 Join Date: Mar 2014 Device: Kobo	They can make the money back if their smartphones starts to sell. Whether it sells or not is another question.

10-23-2014, 11:48 PM	#9
FizzyWater You kids get off my lawn! Posts: 4,220 Karma: 73492664 Join Date: Aug 2007 Location: Columbus, Ohio Device: Oasis 2 and Libra H2O and half a dozen older models I can't let go of	I have to wonder if the higher-than-normal losses are due to the release of that cell phone and the TV box. Neither seems to be all that popular.

10-24-2014, 10:21 AM	#12
pwalker8 Grand Sorcerer Posts: 7,196 Karma: 70314280 Join Date: Dec 2006 Location: Atlanta, GA Device: iPad Pro, iPad mini, Kobo Aura, Amazon paperwhite, Sony PRS-T2	I see that I wasn't disappointed. Plowing money back into the company is a good strategy for a growing company, but Amazon is a mature company now. Eventually, you have to show a profit. If you don't, then people stop investing in you. That's one reason that stock prices dropped.

10-24-2014, 10:33 AM	#13
DiapDealer Grand Sorcerer Posts: 28,569 Karma: 204127028 Join Date: Jan 2010 Device: Nexus 7, Kindle Fire HD	Yes. Your baiting was successful. How utterly surprising and wonderful for you.