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Amazon's Sales +29% But Profit -96% to $7M

Jul 26, 2012 4:53 PM   By Jeff Miller
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RAPAPORT... Amazon.com reported revenue of $12.83 billion for the second quarter  that ended on June 30, a year-on-year increase of 29 percent. Operating expenses, including cost of sales,  marketing and administrative expenses, jumped 31 percent year on year to $12.73 billion. Net income fell to $7 million from $191 million one year ago, a total that includes an estimated net loss of $65 million related to the acquisition of Kiva Systems Inc.

Operating cash flow was $3.22 billion for the trailing 12 months, compared with $3.21 billion for the comparable period, and free cash flow decreased 40 percent to $1.10 billion for the trailing year. Amazon recorded an unfavorable impact from foreign exchange rates of $272 million, which decreased operating income by $8 million.

The North America segment's sales, representing the company’s U.S. and Canadian sites, rose 36 percent year on year to $7.33 billion, while the international segment's sales, representing the  U.K., Germany, Japan, France, China, Italy and Spain, rose 22 percent to $5.51 billion. Worldwide media sales grew 13 percent to $4.12 billion and electronics and other general merchandise sales, including jewelry, grew 38 percent to $8.16 billion.

The online store anticipates revenue growth will range between 19 percent and 31 percent for its third quarter along with an operating loss ranging  between $350 million to $50 million.

“Amazon Prime is now the best bargain in the history of shopping – that is not hyperbole,” said Jeff Bezos, the founder of Amazon.com. “We successfully launched Prime seven years ago with free unlimited two-day shipping on one million items. The price of annual membership was $79. Since then, Prime selection has grown to 15 million items. We've also added 18,000 movies and TV episodes available for unlimited streaming. And we’ve added the Kindle Owners’ Lending Library – borrow 170,000 books for free with no due dates – it even includes all seven Harry Potter books. What hasn’t changed since we launched Prime? The price. It’s still $79. We’re very grateful to our Prime members, and thank them whole-heartedly for the business and for the word-of-mouth that has made this program grow.”

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