Amazon just reported second-quarter earnings, with sales increasing 22 percent to $15.7 billion in the second quarter, compared with $12.83 billion in second quarter 2012. Net loss was $7 million in the second quarter, or $0.02 per diluted share, compared with net income of $7 million, or $0.01 per diluted share, in second quarter 2012. Analysts expected $15.74 billion in revenue, and $0.05 on earnings per share.
Operating income decreased 26 percent to $79 million in the second quarter, compared with $107 million in second quarter 2012.
“We’re so grateful to our customers for their response to Kindle devices and our digital ecosystem. This past quarter, our top 10 selling items worldwide were all digital products – Kindles, Kindle Fire HDs, accessories and digital content,” said Amazon founder and CEO Jeff Bezos, in a statement.
“The Kindle service keeps getting better. The Kindle Store now offers millions of titles including more than 350,000 exclusives that you won’t find anywhere else. Prime Instant Video has surpassed 40,000 titles, including many premium exclusives like Downton Abbey and Under the Dome. And we’ve added more than a thousand books, games, educational apps, movies and TV shows to Kindle FreeTime Unlimited, bringing together in one place all the types of content kids and parents love.”
Bezos didn’t address why Amazon missed on expectations for the quarter, but perhaps this will be revealed in the call. According to analyst estimates, the ecommerce giant was expected to post net income of $28.3 million.
It’s been an eventful quarter for Amazon. Towards the end of the first quarter, Amazon purchased social reading service Goodreads, which now has 20 million members. Amazon also expanded its international footprint, including expansion to India. Additionally the company bought screen technology company Liquavista from Samsung.
Other news included the expansion of its grocery delivery service to L.A. and San Francisco, a new Facebook-focused gifting product, an online store for 3D printers, and of course there were those smartphone rumors.
Last month, Re/code reported that Amazon was in talks to create a streaming music service to bundle with Prime subscriptions. Now, the Wall Street Journal is reaffirming that rumor. The Journal reports that Amazon is “hoping to offer an on-demand music-streaming service” to Prime customers-but it also cites people familiar with the matter as claiming that it “may limit how much a person can listen to any given song.” Apparently Amazon has been in extensive negotiations with record companies and music publishers seeking to license music for the new service-though it is, apparently, far from a done deal, largely down to financial terms. From the Journal: “Amazon has told record companies it would pay them out of a fixed pool of money, according to people familiar with the matter, instead of compensating them based on how often users listen to their songs. Music companies are seeking to withhold their newest music from the service, a person familiar with the matter said.”
Read the full story at Gizmodo, and the original report at The Wall Street Journal.
It turns out that not only is the U.S. Postal Service delivering on Saturdays, but, under a new deal with Amazon, they will be making some deliveries on Sundays, as well.
Announced, fittingly, on Sunday evening, Amazon said that Prime customers in New York and Los Angeles can now get packages delivered via the local postman on Sundays. Amazon said the service will expand to “a large portion of the U.S. population” next year, including those in Dallas, Houston, New Orleans and Phoenix, among other cities.
“If you’re an Amazon Prime member, you can order a backpack for your child on Friday and be packing it for them Sunday night,” Amazon VP Dave Clark said in a statement. “We’re excited that now every day is an Amazon delivery day, and we know our Prime members, who voraciously shop on Amazon, will love the additional convenience they will experience as part of this new service.”
A statement from the Post Office suggests that the service may not be limited to Amazon.
“As online shopping continues to increase, the Postal Service is very happy to offer shippers like Amazon the option of having packages delivered on Sunday,” said Postmaster General Patrick R. Donahoe. “With this new service, the Postal Service is now delivering packages seven days a week in select cities. Customers can expect the same reliable and valued service that the Postal Service currently provides.”
An Amazon representative said that the Sunday service is currently only available to Amazon customers.
Amazon has been investing a lot on its tablets (including the Kindle Fire), and this shows on its quarterly earnings: the profits for the giant online retailer are down 73%, and the stock is taking a dive in after-hours and the losses stand at 14% for now. We’ll see what it really looks like tomorrow.
But even if the quarter’s net income of $63M falls short of last year’s $231M, Amazon is hardly in any danger, and the game here is to sell tablets at cost (or at a loss) in order to make profits from sales of digital goods in the future. This is a business model that has been successfully used by game consoles, although I would stop the comparison there because the tablet market is very different in both variety and eco-system.
Still, Amazon is not there to “fight” against Apple, Samsung and other tablet makers. What Amazon really wants to do is to enable more people to shop for Amazon’s digital content, and if that means giving them a tablet for cheap, then so be it. The question is whether or not Amazon can sell enough digital good to make up for the hardware cost/losses? In theory, they could, and if that’s indeed true, they may come back stronger than ever.
Hewlett-Packard and Google have cited overheating battery chargers as the reason why Best Buy and Amazon have stopped selling the Chromebook 11 notebook.
HP and Google have just issued a joint statement saying that the notebook’s charger had been overheating. They said that anyone who has already bought a Chromebook 11 can use another Micro-USB charger and continue using it.
Here’s the statement:
Google and HP are pausing sales of the HP Chromebook 11 after receiving a small number of user reports that some chargers included with the device have been damaged due to over-heating during use. We are working with the Consumer Product Safety Commission to identify the appropriate corrective action, and will provide additional information and instructions as soon as we can.
In the meantime, customers who have purchased an HP Chromebook 11 should not use the original charger provided with the product. In the interim they may continue using their HP Chromebook 11 with any other Underwriters Laboratories-listed micro-USB charger, for example one provided with a tablet or smartphone. We apologize for the inconvenience.
Chromebook 11 notebooks had been unceremoniously pulled from the shelves of Best Buy stores; sales were also stopped at Amazon. According to the Verge, which first reported the story, Best Buy stores were ordered to “stop selling the HP Chromebook 11 effective immediately” and to move existing inventory to a “secure location.”
Meanwhile, Amazon had done the same thing with its stock. A page that used to display the Chromebook 11 is now unavailable, and searches for the notebook now only return the Chromebook 14 in the results.
HP added Chromebooks to its personal computer lineup earlier this year in partial response to the Microsoft Surface tablet, and as a way of shaking up its PC business amid declining sales. Chromebooks run Google’s ChromeOS operating system, and HP has generally been an all-Windows shop.
This discontinuation of sales doesn’t appear to extend to HP’s other model, the Chromebook 14, which Best Buy and Amazon both continue to sell.
HP shares rose by 27 cents, or more than one percent, to $26.49 a share. Google shares rose $21.07, or two percent, to $1,032.58 a share.
Some of us fans have been waiting for a Marvel Lego game and were happy to hear the announcement that we would be mini-figing it this fall as our favorite Marvel heroes. Not much has come out since that spectacular Game Informer reveal until now that is.
Okay really we found out that there will be some spiffy pre-order bonuses. The coolest of the bonuses lie at your local Wal-Mart where you can snag an exclusive Iron Patriot mini-fig. Woot! Heading to the old Gamestop and plunking five bucks down will get you the pretty sweet Spider-Man keychain. Powerup Rewards members will almost score a free DLC pack. Lastly, pre-ordering at Amazon gets a fresh $10 games credit.
Hit the break to check out the trailer, pay attention to the shadow at the end! Marvel Lego heroes will hit consoles and PC this fall.