Amazon either does or does not disappoint investors, reports Kindle Fire still hottest product in 2Q2012
July 26, 2012 | 7:51 pm
Sometimes it’s weird how two news sources can look at the same things and come to entirely different conclusions. Both paidContent and The Verge have coverage of Amazon’s latest quarterly earnings report, and they have rather strange differences in tone.
PaidContent’s headline is “Amazon disappoints investors with plunging profits.” pointing out that net income for the quarter is down from $191 million for the same quarter last year to $7 million. Investors are reportedly “concerned” about Amazon Prime, which they think is too cheap at $79.
But there’s nothing in The Verge’s longer article to suggest anyone is even upset at all. It does mention the $7 million income figure, but on the other hand notes that Amazon expected its operating income for this quarter to be somewhere between minus $260 and plus $40 million, and it managed plus $107 million.
Furthermore, it even casts a relatively light mood over the fact that Amazon expects to lose between $50 and $350 million in the third quarter of this year, as it makes ready for the lucrative holiday season. Amazon has always been able to do a lot better on Wall Street than its generally-low quarterly profits suggest it should, The Verge notes, partly because it has really good revenue growth, partly because it always pours so much of that revenue back into new tech and infrastructure development (which keeps profits low on paper)…and partly because Jeff Bezos is a visionary with an excellent track record.
At any rate, Amazon’s press release reports that “Kindle Fire remains Amazon’s bestselling item, and its top ten bestselling products in the quarter were Kindles, e-books, and Kindle accessories.” I still think it’s kind of amazing that the top-selling products of the world’s biggest paper book store all have to do with e-books. My, how far we’ve really come.