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Earnings drop

25 Oct, 2014

Amazon reports a wider-than-expected loss in the third quarter, and gives a disappointing holiday forecast. Net loss for the quarter was $437 million, or 95 cents a share, far steeper than the loss of 76 cents a share analysts were expecting. Revenue jumped 20% to $20.6 billion but was also short of expectations. Amazon expects holiday quarter revenue of $27.3 billion and $30.3 billion, below analyst expectations of $30.9 billion. The 7%-18% rise compares with 20% a year earlier. One cause is its launches of new product lines like the Fire phone, which needed a steep price cut after launch – it took a charge of $170 million related to ‘inventory evaluation and supplier commitment costs’ for Fire, and has about $83 million of Fire inventory at the end of the quarter.