Amazon posts first quarterly loss in more than four years

By on October 26, 2012, 7:30 AM

Amazon on Thursday posted a quarterly loss for the first time in more than four years. The retailer reported revenue of $13.8 billion, up 27 percent but still just under analyst expectations of $13.9 billion and right in the middle of their own predictions between $12.9 billion and $14.3 billion.

Amazon recorded a net loss of $274 million during the quarter, or $0.60 per diluted share, largely due to an investment in daily deals website LivingSocial. Even without the LivingSocial charge, the company with everything from A to Z would have lost $0.23 which is worse than most predicted. During the same time last year, the online retailer earned $63 million, or $0.14 per share. 

CEO Jeff Bezos stood by his company’s strategy of selling products as cheaply as possible. “Our approach is to work hard to charge less,” he said in a statement. Amazon favors selling devices like the Kindle Fire HD at near break-even pricing and relying on their vast ecosystem to generate revenue after the sale. Sure it’s tough on margins, but it’s even tougher on the competition.

It’s one of the reasons why the company’s tablet is the best-selling product on the site. Unsurprisingly, the next two best-selling products are the Kindle Paperwhite and the $69 Kindle. Amazon says they are selling more of each of these devices than they are the #4 bestselling product, the third book in the Fifty Shades of Grey series.

The company’s high end tablet, the $299 Kindle Fire HD 8.9”, is scheduled to ship on November 20.

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