14 DAY TRIAL // It must be some sort of magic that Amazon is one of the biggest e-commerce companies in the United States and still continues to hemorrhage money.
During the third quarter of the year, Amazon brought in a whopping $20.58 billion (€16.23 billion), which is 6 percent more than the previous quarter. Considering that the holiday shopping season is just around the corner, it’s safe to say that the next earnings call will bring even higher numbers.
Out of the whole sum, sales of electronics and other general merchandise made up $13.95 billion (€11 billion), or about 68 percent of the total. Its digital media sales were quite nice as well, making 25 percent of the total number, namely about $5.24 billion (€4.13 billion).
And while all this sounds beyond great, there’s a catch. Jeff Bezos’ company posted a net loss of $437 million (€344.7 million) for the trimester ending on September 30. That’s 966 percent larger than it was in the same period of 2013, as The Register points out.
The company had warned everyone that its losses would be steep this quarter, but it was still surprising to see just how far down the slope it went. In light of its huge revenues, Amazon’s losses are surprising.
Lots of spending at Amazon
The company keeps spending money left and right and using even more to expand its infrastructure. That being said, it’s quite difficult to tell how much of the “purchases of property and equipment” goes into building data centers and buying servers. The company spent $1.38 billion (€1.08 billion) on capital expenditures, 33 percent more than it did in the same period of last year, and 7 percent more than in the second quarter of 2013.
It should be mentioned that Amazon has just opened a new data center for Amazon Web Services in Frankfurt, Germany, this week, which surely must have weighted quite a bit on the company’s pocket.
“As we get ready for this upcoming holiday season, we are focused on making the customer experience easier and more stress-free than ever. In addition to our already low prices, we will offer more than 15,000 Lightning Deals with early access to select deals for Prime members, hundreds of millions of products across dozens of categories, curated gift lists like Holiday Toy List and Electronics Holiday Gift Guide, new features like #AmazonWishList, and a great new lineup of products like Kindle Voyage and Fire HD Kids Edition. And if you order your gifts on AmazonSmile, we’ll donate a percentage of your purchase price to your favorite charity,” said Jeff Bezos, founder and CEO of Amazon.