Amazon reaches disappointing oversees sales and operational results

Amazon reaches disappointing oversees sales and operational results

American online giant Amazon had unexpectedly disappointing results for its expansion outside of the US in the second quarter of 2013. Sales were only 13 percent higher than in the same period of last year.

US area of biggest growth

Globally Amazon had sales of 15.7 billion dollar (12 billion euro) between early April and end June, 22% more than in the same period of 2012. That was a disappointing number, because the economic crisis in Europe keeps on troubling the company.

 

Sales outside of the US ‘only’ went up by 13% to 6.2 billion dollar (4.7 billion euro). The American home market grew by an impressive 30 percent.

 

Investing in sales leads to negative results

As operational costs soared by 23%, net profits of 7 million dollar turned into a net loss of the same amount. The last time Amazon made a loss, was in the third quarter of 2012.

 

Amazon is spending a lot of money to ensure future growth. For example, it invests heavily in more storage space closer to the consumers. That way the company wants to ensure faster deliveries.

 

Cloud computing and video content

Amazon is also trying to expand its range by not only focusing on the online sale of physical goods. They are also offering cloud computing to companies and governments for example. In that same vision they made the switch from books and cd to eBooks and mp3-files. The best sold items on Amazon currently are digital products.

 

That is also why the company is buying the rights to video content, so it can for example stream films or develop products for Kindle.

 

Next quarter also difficult

For the third quarter, Amazon is expecting sales between 15.45 billion dollar to 17.15 billion dollar (between 11.6 and 13 billion euro). The operational result is expected to be between a loss of 100 million dollar and a profit of 275 million dollar (-75 and +200 million euro).

 

That prognosis is so broad, because Amazon is taking several one-off expenses into account, but even the highest figures are lower than what was expected by financial analysts.

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