Featured StoryAmazon.com Inc. (Nasdaq: AMZN) today (Thursday) reported a fiscal second-quarter profit of $7 million, or a penny a share, on revenue of $12.83 billion - very close to what was expected, but still a miss.
Analysts forecast a sharp increase in revenue, estimating earnings per share of two cents on revenue of $12.92 billion. Sales were up 29%., but net income fell 96% from the same period a year ago.
Weighing on its bottom line was investments in new distribution facilities, a number closely watched because Amazon has a history of reporting strong revenue. The company has been plowing copious amounts of its earnings into building a distribution network to help it more efficiently grow its business long term.
After reporting better-than-expected first-quarter numbers, 41 cents on revenue of $9.91 billion, the Seattle, WA.-based company had expected revenue to fall in the range of $11.9 billion and $13.3 billion.
Pushing the stock down as much as 7% in after-hours trading was the Q3 guidance.
Amazon.com predicted a Q3 operating loss of between $50 million and $350 million, versus Wall Street estimates of income of $119.6 million. Amazon said it expects Q3 revenue of $12.9 to $14.3 billion, which includes the Wall Street estimate of $14.1 billion.
Amazon Kindle Tablet Will Plump Revenue and Disrupt Market
A rumored Amazon Inc. (Nasdaq: AMZN) Kindle Tablet will deliver billions of dollars in fresh revenue next year.
In addition to its hardware sales, the tablet will provide a quick and convenient way for Amazon to capture a bigger chunk of the digital media market and allow customers to buy any of its millions of offerings from almost anywhere.
The 7-inch tablet is expected to appear within the next month or so and cost just $250. Such a low price from a trusted brand like Amazon will disrupt the entire tablet market.
"A proprietary tablet would allow Amazon to widen itscompetitive moat, improve consumer experience and benefit from the rapid growth in mobile usage," Jefferies & Co.'s (NYSE: JEF) Youssef Squali wrote in a report.
Although analysts expect Amazon to make little profit from the tablet itself, its potential for selling more of its digital wares such as e-books, movies, music and Google Inc. (Nasdaq: GOOG) Android apps is boundless.
The Kindle e-reader shows how hardware can drive media sales. It has helped Amazon capture 90% of the e-book market.
The Kindle e-reader will account for 9.9% of Amazon's total revenue next year, just five years after its debut, according to Citigroup Inc. (NYSE: C) analyst Mark Mahaney. Mahaney estimates about half of that revenue, $6.1 billion, will be from sales of the device, with the other half from e-books.
An Amazon Kindle Tablet will open up multiple digital avenues of growth.
Take online video sales, for example. Amazon has just 4.2% of that market, well behind the 65.48% share of Apple Inc.'s (Nasdaq: AAPL) iTunes Store.
In terms of additional revenue, the Kindle tablet could quickly rival that of the e-reader.
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Barnes & Noble Sale Won't Rid the Retailer of its Woes
Barnes & Noble Inc. (NYSE: BKS) announced late Tuesday that it would put itself up for sale. But even with its recent struggles analysts aren't sure of what the company hopes to accomplish.
"There are companies that do this because they have to and there are companies that do this because they have impatient shareholders and I'm not sure what's driving this kind of statement," Michael Norris, a senior analyst at Simba Information, told The Associated Press. "It just seems daft."
The company's board said that it believed Barnes & Noble stock was "significantly undervalued" and that it had established a special committee to review its options.
Hot Stocks: Apple's iPad Picks Up Where Amazon's Kindle Left Off
When it unveiled the Kindle e-reader in late 2007, Amazon.com Inc. (Nasdaq: AMZN) created a whole new market for digital books, newspapers and magazines.
Now industry innovator Apple Inc. (Nasdaq: AAPL) is taking that market to an entirely new level.
After months of spirited speculation, Apple on Wednesday introduced a full-color e-reader that doubles as a netbook.
- How Sustainable is the Kindle's Early Success? Nearly two years after Amazon.com Inc. (Nasdaq: AMZN) released its Kindle e-book reader, it appears that digital books will finally be embraced by consumers previously reluctant to buy a pricey e-reader device. Roughly 3 million e-readers will be sold this year, Forrester Research Inc. (Nasdaq: FORR) said in a recent report that revised a previous […] Read More...