Amazon stockholders are grumbling a bit today. The company has announced third quarter earnings, and they’ve fallen below expectations. In fact, the giant e-tailer missed on estimates for sales, earnings and forward guidance – the company’s first loss in years. Sales came in at $13.81 billion versus expectations of $13.9 billion for the quarter. The quarterly net loss has been attributed to Amazon’s recent heavy spending and the economic slowdown in Europe.
The company’s shares dipped slightly to $220.75 in after-hours trading following the results.
The company said its third-quarter net loss was $274 million, or 60 cents a share, versus net income of $63 million, or 14 cents a share, in the third quarter of 2011. Part of the loss related to an impairment charge from Amazon's investment in daily deal company LivingSocial (News - Alert), according to Reuters.
Addressing investors, Amazon CEO was curiously close-mouthed about the missed expectations. Instead of addressing the loss on the LivingSocial investment, Amazon CEO Jeff Bezos chose to talk up Amazon's Kindle e-reader device, reported Business Insider.
“[T]he $199 Kindle Fire HD is the number-one bestselling product across Amazon worldwide," said Bezos. "The next two bestselling products worldwide are our Kindle Paperwhite and our $69 Kindle. We’re selling more of each of these devices than the #4 bestselling product; book three of the Fifty Shades of Grey series.”
Amazon is reportedly facing more competition this holiday season from big retailers such as Target Corp and Best Buy (News - Alert), both of which are planning to match some of Amazon’s prices online. Wal-Mart Stores, Inc. is also reportedly testing same-day delivery in some cities this holiday, while Target (News - Alert) is selling more exclusive products that cannot be bought at lower prices online.
Edited by Braden Becker