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Amazon reports in-line loss for Q3 on strong sales

  • Amazon.com (AMZN): Q3 EPS of -$0.09 in-line. Revenue of $17.1B (+24% Y/Y) beats by $400M. Shares +7.4% AH. (PR)

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Comments (49)
  • HZLIU
    , contributor
    Comments (212) | Send Message
     
    That is madness of market, Netflix style.
    24 Oct 2013, 04:10 PM Reply Like
  • vmetla
    , contributor
    Comments (69) | Send Message
     
    To the moon, or let me put this way - To Infinity and beyond..
    what kind of market this is .
    24 Oct 2013, 04:13 PM Reply Like
  • knrdk
    , contributor
    Comments (22) | Send Message
     
    guess not having that kindle press event really paid off, kudos to santos.
    24 Oct 2013, 04:16 PM Reply Like
  • stoj
    , contributor
    Comments (451) | Send Message
     
    cheers ! a beer on me
    24 Oct 2013, 04:18 PM Reply Like
  • Germ ANE
    , contributor
    Comments (9) | Send Message
     
    $400M extra in revenue and folks think this is worth billions more.

     

    Craziness, but GL all.
    24 Oct 2013, 04:18 PM Reply Like
  • th3decider
    , contributor
    Comments (406) | Send Message
     
    The great thing about a negative EPS,, is that you no longer have to worry about a high PE ratio....
    24 Oct 2013, 04:21 PM Reply Like
  • filipo
    , contributor
    Comments (4024) | Send Message
     
    th3,
    Amazon never cared about EPS. That's why it became number 1 selling machine.
    The only thing that counts for them is turnover. That beat the expectations, hence the strong uptick of the stock. Perfectly normal.
    24 Oct 2013, 04:27 PM Reply Like
  • Walter P. Chrysler
    , contributor
    Comments (300) | Send Message
     
    price to sales is the only metric i've ever seen that has any foundational aspect vis a vis investing. GE is a case study in "an amazing P/E that almost went bankrupt." in many ways that company still is. this company is massively short "because all they produce is sales." at some point they will get a sales miss...but like Tesla the shorts have been totally obliterated. Obviously anyone in retail should be scared to death of this company. compound sales growth rates at this level is truly epochal and is putting the screws to every retailer out there save E-bay. wal mart, home depot, lowes, etc...look out. i would argue strongly in favor of pay raises across the board and massive hiring sprees otherwise not just the Government but markets will start looking askance at the brick and mortar numbers.
    24 Oct 2013, 07:48 PM Reply Like
  • dctodd27
    , contributor
    Comments (119) | Send Message
     
    I'll start a business selling $20 bills for $19. My sales will be through the roof but its a terrible business model. P/S isn't really all that meaningful...

     

    Courtesy of GMO's James Montier
    24 Oct 2013, 09:46 PM Reply Like
  • mobyss
    , contributor
    Comments (2189) | Send Message
     
    Finally - Amazon made some money, has positive earnings, and now has an actual PE!

     

    Wait, what?
    24 Oct 2013, 04:23 PM Reply Like
  • chopchop0
    , contributor
    Comments (3941) | Send Message
     
    I have a feeling the stock would actually drop if it made really good money. Would be the end of growth. LOL
    24 Oct 2013, 04:35 PM Reply Like
  • travis26
    , contributor
    Comments (15) | Send Message
     
    That sounds about right. If you aren't growing, you are completely disappearing seems to be a common attitude towards some stocks, at least temporarily (AAPL and HPQ in the past). This great logic fits well with bad news is good news.
    24 Oct 2013, 05:10 PM Reply Like
  • tasosnikic
    , contributor
    Comments (4) | Send Message
     
    Okay, this is insane.
    24 Oct 2013, 04:27 PM Reply Like
  • JGill24
    , contributor
    Comments (4) | Send Message
     
    I'm shocked as well. I for one thought the stock was going to drop. I figured EPS would be in the red again. Shocked and surprised.
    24 Oct 2013, 04:27 PM Reply Like
  • filipo
    , contributor
    Comments (4024) | Send Message
     
    JG,
    I told you: it's gonna be the pleasant surprise that stocks will keep on climbing, at least for the next few weeks.
    And wait, this is only the beginning of the party.
    24 Oct 2013, 04:32 PM Reply Like
  • th3decider
    , contributor
    Comments (406) | Send Message
     
    Thats right. The party is never going to stop. Just like it didnt stop in 1999 or 2007.
    24 Oct 2013, 04:36 PM Reply Like
  • filipo
    , contributor
    Comments (4024) | Send Message
     
    th3,
    There you have that negative sentiment again. Can you never enjoy something agreable, be it just a few weeks ?
    I pity your environment.
    24 Oct 2013, 04:41 PM Reply Like
  • JGill24
    , contributor
    Comments (4) | Send Message
     
    Filipo,

     

    Sure Amazon increased their revenue, but it doesn't earn as much profit. Do you expect this to crash down like Netflix the day after they released their earnings?
    24 Oct 2013, 09:58 PM Reply Like
  • filipo
    , contributor
    Comments (4024) | Send Message
     
    JG,
    Shares of companies with a business model like Amazon always react very heftily on the news because the difference between "good" news and "bad" news is huge.
    I wouldn't call Amazon an equity of a "good family father" therefore. It's always a bet and betting can be dangerous. But when everyone is very negative on a share and the share has been behaving accordingly, going very low, there isn't much "good" news needed to make it jump up. The contrary is true too, but doesn't apply to Amazon of course.
    Having said that, I expect AMZN to loose a bit of it's exhuberance tomorrow. Trading and taking profit is the best one can do in such a case. Even if I'm wrong on this, and AMZN would creep higher, profit taking won't make you poorer.
    24 Oct 2013, 11:19 PM Reply Like
  • RetireMend.Com
    , contributor
    Comment (1) | Send Message
     
    Let's keep buying a stock that loses money in hopes that one day it will pay off. Hopefully that day comes before wall street decides they don't want to hold it anymore.
    24 Oct 2013, 04:31 PM Reply Like
  • HZLIU
    , contributor
    Comments (212) | Send Message
     
    Worst than 2000 internet bubble, at that time you need to beat a whisper number. Now you only need to meet your own higher range. This is animal spirit what Fed wants. The problem is that I buy more online from Walmart.com than Amazon for a year now as the item you find at Walmart.com always cheaper. E- retail will grow but does not mean profit. Beso knew that as he diversifies Amazon business.
    24 Oct 2013, 04:46 PM Reply Like
  • chopchop0
    , contributor
    Comments (3941) | Send Message
     
    and unlike AMZN, WMT actually cares about making a profit and doesn't trade at some ungodly multiple.

     

    Long WMT
    24 Oct 2013, 05:47 PM Reply Like
  • Julian Acosta
    , contributor
    Comments (129) | Send Message
     
    Up 24% over same quarter last year? What is that mainly due to?
    24 Oct 2013, 04:58 PM Reply Like
  • Bouchart
    , contributor
    Comments (803) | Send Message
     
    The poor guy must feel like Captain Ahab.
    24 Oct 2013, 05:02 PM Reply Like
  • Bouchart
    , contributor
    Comments (803) | Send Message
     
    A company that doesn't earn a profit and has no expectations of doing so in the future?

     

    BUY! BUY! BUY!
    24 Oct 2013, 05:03 PM Reply Like
  • nineliveskat
    , contributor
    Comments (2) | Send Message
     
    While you guys have beating up on Amazon, I've made 100K on it! Too bad for you bears.
    24 Oct 2013, 05:09 PM Reply Like
  • Mark Krieger
    , contributor
    Comments (4470) | Send Message
     
    it is just creative accounting. Ebook sales were accelerated into the third Q due to an accounting change..those sales that funneled into the third quarter, will not be there for the fourth Q

     

    it is just a gimmick to benefit the very short term at the expense of the long term.
    24 Oct 2013, 05:23 PM Reply Like
  • Paulo Santos
    , contributor
    Comments (24892) | Send Message
     
    Nope, the accounting change WILL be there on Q4 as well, it inflates revenues all this year and for the start of 2014 as well.

     

    AMZN got asked the question in the conference call and did NOT answer.

     

    Details regarding the accounting change and its impact here:

     

    http://seekingalpha.co...
    24 Oct 2013, 05:47 PM Reply Like
  • mthak
    , contributor
    Comments (10) | Send Message
     
    but in 4th quarter, they know that they will be able to accelerate the retail sales....so, keep smoking the YoY, QoQ revenue story and the stock will keep going up and up and...
    classic example of too much easy money in the market. People have started treating the stock market as their favorite pass time
    24 Oct 2013, 06:00 PM Reply Like
  • mobyss
    , contributor
    Comments (2189) | Send Message
     
    Amazon has been around for what - 15 years? How can a business survive for that long without making any money? Losses year after year - where does the operating capital come from? Issuing new stock over and over?

     

    I do use Amazon a lot, but you have to wonder how long this can last, especially now that Walmart and others are really starting to step up their online presence. The chances of Amazon gaining pricing power now are much lower than they were 10 years ago. Now, if they try to sell a TV for $399.97 Walmart is going to sell it for $398.72. Expand this across 10 million products (except for Kindles) and where is the profit going to be made?

     

    I guess for now Amazon is like "Crazy Eddie's House of Furniture" - they lose money on every sale but they make it up on volume!
    24 Oct 2013, 05:30 PM Reply Like
  • DanoX
    , contributor
    Comments (2848) | Send Message
     
    Sad thing is when go down they will take Apple and Google with them.
    24 Oct 2013, 06:28 PM Reply Like
  • u01bsb0
    , contributor
    Comments (707) | Send Message
     
    shame for the shorts.....paulo?
    24 Oct 2013, 06:52 PM Reply Like
  • Paulo Santos
    , contributor
    Comments (24892) | Send Message
     
    It hurts, AMZN met EPS, beat revenues with an accounting change, had lower GM%, lower CSOI%, guided CSOI% lower, had higher shipping costs and higher net shipping costs.

     

    EPS only met because of yet another tax benefit as well.
    24 Oct 2013, 06:59 PM Reply Like
  • bryon Li
    , contributor
    Comments (129) | Send Message
     
    Amzn won't fall until bears surrender, so no point to argue with the bulls now as the tide is on their side. Just quietly wait till the tide turns, of course assuming the bears can survive short squeeze.
    24 Oct 2013, 07:50 PM Reply Like
  • Cagdas Ozgenc
    , contributor
    Comments (408) | Send Message
     
    @Paulo: Amazon can hike the prices 2-3% which automatically translates to 2-3bln net profit with their revenue stream. What makes you think that this is not possible at all? When you have huge volumes you can always extract some juice out of it either by raising prices or lowering costs or capital investments.
    24 Oct 2013, 09:54 PM Reply Like
  • HZLIU
    , contributor
    Comments (212) | Send Message
     
    @Cagdas: If you do little research, you will know Amazon already hike its price. For last one year, I started to use Walmart.com and other online outlet more as they beat Amazon on price and shipping. Amazon's own retail is not competitive now but its 3P is more strong as selection is wider. But the selection from Walmart is better than Amazon 1P. Anything you can find at Walmart.com is almost cheaper than Amazon. Amazon enter each business with low margin and high competition, that is why it is not be able to increase profit. No matter how many distribution center Amazon builts, you can beat the number of Walmart's local stores. Beso is very smart and know it is not enough to you prime member two days free shipping for $79 without throwing lot of free staff (certainly Amazon want you to buy some more). Walmart.com is almost two day shipping with minimal or free S/H.
    24 Oct 2013, 10:06 PM Reply Like
  • Cagdas Ozgenc
    , contributor
    Comments (408) | Send Message
     
    Hzliu. Walmart brand name means nothing outside of US. Amazon brand does. Walmart's online revenues are 5-6% of Amazon's. Probably they will grow, but to a meaningful level I don't know. The same idea can be applied to Apple. But both Apple and Amazon are so strong brand names the pricing may not be relevant. I think what investors are really betting on is that in the future humanity will be so unsocialized that face to face contact will disappear. We will be like those people in Wall-E. There is a cafe, where there is a sign it says: "We don't have wi-fi, talk to each other." needling people who cannot take their eyes off of their phones even in a cafe. Hence the demise of brick and mortar retail. Sit at home in front of your tablet and don't even go out, keep ordering food push-button.
    24 Oct 2013, 10:17 PM Reply Like
  • HZLIU
    , contributor
    Comments (212) | Send Message
     
    There are no really Amazon bears around except some writers at SA. Short interest is almost nothing and shares are very easy to borrow for short. NFLX's short interest is much higher at least mean some big hand there. This market is entering euphoria and could have some leg left until QE stops and interest is raised. This time the bubble will focus on fewer stocks than 2000 but general market will get expanded P/E. There were many high flyers in 2000. Today the whole market is not as bubble as 2000, but subset of market is in bubble. However, the P/E was not in the bubble mode in 2008, the market crashed as well.
    24 Oct 2013, 10:22 PM Reply Like
  • HZLIU
    , contributor
    Comments (212) | Send Message
     
    Cagdas: I don't know other places. Walmart is much bigger name in China and Amazon is only small fish in the e-retail China. Apple is different; Apple is symbol of luxury as well of Walmart in China. E-retail in China is really cutting throat. Count me the one, never use a Apple product and always go face to face. Never want to live in Wall-E. We are human.
    25 Oct 2013, 09:08 AM Reply Like
  • gensearch2
    , contributor
    Comments (1518) | Send Message
     
    I found it interesting that CNBC announced AMZN beat on earnings.
    24 Oct 2013, 07:03 PM Reply Like
  • C.N
    , contributor
    Comments (223) | Send Message
     
    nasdaq on the cusp of 4000( 1999 december, daq up over 700 pts that month), so i am going to assume that AAPL earnings next week will help nasdaq touch 4000. Average return for nasdaq from nov to jan( 3 months) over the last 40+ years = 6 %. feb to august(7 months) return over the last 40+ years =4.5%. Nasdaq goes up 150-200 pts, amzn goes up 10+%. I am guessing top for amzn will be 375-400 range.
    24 Oct 2013, 07:33 PM Reply Like
  • northhills24
    , contributor
    Comments (1636) | Send Message
     
    EXACTLY what i was going to say...
    24 Oct 2013, 10:35 PM Reply Like
  • Mort19
    , contributor
    Comments (287) | Send Message
     
    I'm sure you read his articles you know that he said the change in the e-publishing business changed their accounting and as a result it made the same revenue look much higher. In other words this beat in revenues was actually a substantial miss and of course they have nothing to say about it.
    24 Oct 2013, 11:58 PM Reply Like
  • PersephonShropshire
    , contributor
    Comments (137) | Send Message
     
    It will be another 9 montsh until Amazon reports earnings that won't be inflated beacause of the ebook accounting change, until then the market obviously dosen't care and will celebrate without any question.
    25 Oct 2013, 12:56 AM Reply Like
  • Paulo Santos
    , contributor
    Comments (24892) | Send Message
     
    Sad but probably true. The analysts sure don't care.
    25 Oct 2013, 06:08 AM Reply Like
  • gensearch2
    , contributor
    Comments (1518) | Send Message
     
    Analysts only explain why a stock is headed in the direction it's headed. There is usually a metric they can point at to rationalize direction. Cash flow, price-to-sales, revenue growth .... Pick anything you want. It doesn't need to be the same metric from one quarter to another and you certainly don't need to point out it's because it's an accounting anomoly.

     

    I've noticed on CNBC, that "analysis" on AMZN ER is delayed until the direction of the share price after market is well on it's way.
    25 Oct 2013, 08:41 AM Reply Like
  • Cagdas Ozgenc
    , contributor
    Comments (408) | Send Message
     
    There was one single negative article on WSJ regarding the earnings report. It was taken off in 5 minutes after it was published. I don't want to spit out conspiracy theories but it seems they are buying the press.
    25 Oct 2013, 08:58 AM Reply Like
  • Paulo Santos
    , contributor
    Comments (24892) | Send Message
     
    What did it say?
    25 Oct 2013, 08:59 AM Reply Like
  • Cagdas Ozgenc
    , contributor
    Comments (408) | Send Message
     
    I could read only a few lines. The title was something like "revenues overshadowing losses"
    25 Oct 2013, 09:03 AM Reply Like
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