Amazon announced that it lost money in the third quarter, which continued its unimpressive earnings reports. But Amazon supporters were unfazed by the news. The report was released after the market closed and sent its shares to decline as much as 9 percent in after-hours trading. The shares recovered right away. Its stock hit a record high earlier this year and still trades at high price/earnings multiple.
Amazon is not focused on trying to make money. Instead it wants to expand as fast as it can and it has been successful for the last 15 years. It started as a small start-up and is now the country’s biggest retailers.
Its third quarter revenue was $13.8 billion, which is slightly lower than the $13.9 billion that analysts estimated but still up 27 percent compared to last year. Despite its high sales numbers, the company has sent out a warning that of a loss in earnings.
During a conference call, Tom Szkutak, Amazon’s chief financial officer, didn’t give out details of the company’s future plans. He said that the company’s practice of selling through other retailers is not a driving force of its business.
Amazon’s strategy is to sell as cheap as possible. It is tough on its margins but it makes it doubly tough on its competitors. Radio Shack didn’t meet its earnings forecast and doubted its viability. H. H. Gregg, a specialty home appliance and electronics retailer, saw a decline of its earnings by 13 percent. Best Buy also announced a drop of 10 percent and warned that its third quarter profit would be lower than expected.
