Hi Victor Lazlo; I read the Motley Fools commentary on AMZN results, and noticed some oddities..
fnews.yahoo.com
Second quarter revenues soared 171% to $314.4 million from $116.0 million a year ago. (They were up just 7% from the first quarter's $293.6 million.) That was reportedly in the middle of the $306 million to $325 million range projected by Wall Street analysts, though some may have been looking for an even higher number. Including $55.2 million in costs related to mergers, acquisitions, and stock-based compensation, Amazon lost $138 million in the period, or $0.86 per share. On an operating basis, the net loss amounted to $82.8 million, or $0.51 per share, in line with expectations.
Just where do these analysts publish their estimates for future quarter revenues? All I can find are predictions of (earnings).
The relatively modest sequential revenue uptick owes something to the fact that Amazon did not add any new product categories or "verticals" during the quarter.
That's a surprise! Everybody has been supposing that the individual core businesses are expanding at 170% per year. Evidently not. If AMZN had broken out book sales, the growth in them, quarter to quarter, would have been well under 7%. How much? No one outside the company knows, but clearly the bloom is off the rose on book sales. Growth in books has presumably slowed to something under 7% annualized or 31% per year.
But AMZN is spending gobs of money to purchase infrastructure to support the book business. And as it expands into other "vertical" lines of business, their infrastructure will have to expand proportionately. In other words, in order to keep the top line growth going, AMZN is going to have to blow out that cash pile at some sort of incredible rate.
Amazon's goal is to increase the value of its customers by continuing to add new verticals. The metrics that matter, then, are the growing number of customers, the growing number of product categories, and the continued dedication, foremost, to customer service. By all of these measures, Amazon continues on course. Short-term losses should be a non-issue for Amazon investors. Bezos & Co. are building a business for the long, long haul.
Hmmm. This seems like a change in story. It used to be that the thing to watch was the increase in revenues. But since revenues are up only 7% consecutive quarterly, we are therefore redirected to instead watch the growing number of product categories and customers.
Funny thing. If the categories and customer count keeps increasing, why the big decrease in quarter to quarter growth? Looks like this nag is getting a little long in the tooth, and still no profits.
Also notice that the metric, "sales per customer" isn't one of the metrics that matter. Also notice that "cost to add customer" isn't listed either. Woner why?
-- Carl |
