Specifications of how the Kindle Fire performs against the iPad Mini and overall Kindle device information led the highlights of a disappointing earnings release for Amazon, which saw sales rise in the third quarter and meager profits turn into a loss.
Sales at Amazon were $13.81 billion in the third quarter of 2012 ending Sept. 30, an increase of 27% over the same period last year, according to an earnings release today from the company. Meanwhile, the company suffered an net loss in the quarter of $274 million, compared net income of $63 million in the third quarter last year.
Amazon chief financial officer Tom Szkutak said on an earnings call last quarter that the company expects to bring in $12.9 billion to $14.3 billion in sales but to record a $50 million to $350 million loss. Despite matching its own expectations on earnings, Wall Street analysts had different expectations that the company did not meet and Amazon shares were sent tumbling in after-hours trading, according to PaidContent.
Jeff Bezos, Amazon’s founder and CEO, has long told investors that Amazon had a long-term strategy and not to pay attention to quarter-to-quarter results. He had this to say in the earnings report:
“Our approach is to work hard to charge less. Sell devices near breakeven and you can pack a lot of sophisticated hardware into a very low price point. And our approach is working – the $199 Kindle Fire HD is the #1 bestselling product across Amazon worldwide. Incredibly, this is true even as measured by unit sales. 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. And we haven’t even started shipping our best tablet – the $299 Kindle Fire HD 8.9” ships November 20.”
The report then goes on to detail how the Kindle Fire HD 8.9″ stacks up against the recently announced iPad Mini.
Media sales at Amazon — books, movies, music — were up. North American media sales were up 15% to $2.22 and international media sales were up 7% to $2.39 billion.
Looking ahead to next quarter, Szkutak, the CFO, projected that Amazon would make between $20.25 billioni and $22.75 billion in revenue next quarter and realize something between a $490 million loss to a $310 million profit.