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Friday, 26 October 2012

Amazon posts $274 million loss for Q3 2012, compares iPad mini with Kindle Fire tablets in earnings press release

Now that we have looked at Google’s, Microsoft’s and Apple’s quarterly earnings for the period ending on September 30, it’s time to check out Amazon’s number, as the Kindle Fire maker has also revealed them today.
And it’s not good news despite how the title of its press release, embedded below, may sound, “Amazon.com Announces Third Quarter Sales up 27% to $13.81 Billion,” because it was a losing quarter for the company.
But first, let’s take care of the crazy part in this release: Amazon is offering comparisons between the iPad mini, announced two days ago, and the new Kindle Fire and Kindle Fire HD Android tablets that are have been available to consumers for quite a while now.
In fact, the Kindle Fire tablets have been fighting it out with the Google Nexus 7 so far, while the iPad mini was just rumor. So why the comparison?Nevertheless, here’s why the Kindle Fires are better than the iPad mini, according to Amazon’s PR folks:
Compared to the iPad mini, Kindle Fire HD 8.9” has:
  • 193% more pixels (2,304,000 pixels vs. 786,432 pixels)
  • 56% more pixels-per-inch (254 vs. 163)
  • Watch HD movies and TV – cannot on iPad mini (iPad mini is an SD device)
  • Better audio with dual stereo speakers and Dolby Digital Plus
  • Wi-Fi with dual band, dual antennas + MIMO
  • Costs $30 less
Compared to the iPad mini, Kindle Fire HD 7” has:
  • 30% more pixels (1,024,000 vs. 786,432 pixels)
  • 33% more pixels per inch (216 vs. 163)
  • Watch HD movies and TV – cannot on iPad mini (iPad mini is an SD device)
  • Better audio with dual stereo speakers and Dolby Digital Plus
  • Wi-Fi with dual band, dual antennas + MIMO
  • Costs $130 less
Great stuff, right? Now let’s get back to the actual numbers, because in this department Amazon is yet to compare itself to the main players in the mobile business.
Amazon reported a 27% increase in net sales, $13.81 billion in Q3 2012 compared with $10.88 during the same period last year. But there were no profits. Net losses are at $277 for the quarter or $0.60 per share (EPS), including a $169 million loss reported by LivingSocial, or $0.37. That still leaves Amazon with quite a loss compared to $63 million net income or $0.14 for the same time last year.
Operating loss was at $28 million this quarter, a hefty drop from the $79 million operating income reported in Q3 2011.
Sure, the Kindle Fire tablets are best sellers, according to Amazon, but the company never tells us how many units they sell. Not to mention that they’re all sold at cost, so there are hardly any direct profits for the company there.
Things aren’t looking good for Amazon for the Christmas quarter either, as the company expects either a loss or a profit, and it’s quite a large interval, from $490 million loss to $310 million operating income. In Q4 2011, Amazon saw a $260 million operating income.
Are you buying a Kindle Fire tablet this holiday season?

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