Amazon Loses Money

Amazon.com Inc. (NASDAQ: AMZN) has reported that sales were up 27% to $13.81 billion and its loss was $0.23 in normalized EPS after backing out items. Thomson Reuters was calling for -$0.08 EPS and $13.92 billion. One word of caution: Amazon includes so many items that it is a very jumbled report.

Guidance was listed as follows: Net sales are expected to grow 16% to 31% and come in between $20.25 billion and $22.75 billion. The company is also projecting that the operating income (or loss) is expected to be between negative $490 million and positive $310 million, compared with $260 million last Christmas season’s quarter. This guidance includes approximately $290 million for stock-based compensation and amortization of intangible assets.

Common shares outstanding plus shares underlying stock-based awards totaled 469 million on September 30, 2012, consistent with 469 million one year ago. Thomson Reuters sees estimates of $0.52 EPS and $22.79 billion in forward quarter guidance covering the holiday season, which would be an expectation of 30.7% revenue growth.

The company said “Operating loss was $28 million in the third quarter, compared with operating income of $79 million in third quarter 2011. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating loss was $3 million. Net loss was $274 million in the third quarter, or $0.60 per diluted share, compared with net income of $63 million, or $0.14 per diluted share, in third quarter 2011. The third quarter 2012 includes a loss of $169 million, or $0.37 per diluted share, related to our equity-method share of the losses reported by LivingSocial, primarily attributable to its impairment charge of certain assets, including goodwill.”

Amazon shares closed down 2.4% at $223.00 on the day and shares are down another 4.2% at $213.75 so far in the after-hours trading session.

JON C. OGG