Big losses for Amazon | RetailDetail

Big losses for Amazon

Big losses for Amazon

Online department store Amazon has suffered a 126 million dollar (95 million euro) net loss in 2014's second quarter, its biggest quarterly loss since 2012. Still, Amazon expects worse results for its third quarter.

Turnover up almost 25 %

Amazon's second quarter saw turnover grew 23 % to 19.34 billion dollars (14.5 billion euro), but its financial results lagged behind and created a 15 million dollar (11 million euro) second quarter operational loss - excluding financial costs and one-time results. In 2013's second quarter, Amazon managed a 79 million dollar (60 million euro) operational profit.

 

High delivery costs are partially to blame for the losses: for 99 dollars (73.5 euro) per year, customers can get access to an array of e-books and streaming capabilities. On top of that, they can get free deliveries for everything they buy. These costs are higher than previously anticipated as already 20 million customers have signed up for the service.

 

Amazon has also invested quite heavily in several new projects, like the launch of its first phone, the Fire.

 

Losses increase

CEO Jeff Bezos expects third quarter losses to grow to somewhere between 410 and 810 million dollars (300 to 600 million euro) as the company keeps investing in its logistics.

 

Amazon is, despite these huge losses, not planning to cut costs as further growth should alleviate the issue according to Jeff Bezos and that is why he is looking for new collaborations. Amazon has forecast 19.7 billion to 21.5 billion dollars (14.5 to 16.1 billion euro) in turnover for the current quarter.

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