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Amazon Made $10.9 Billion Last Quarter
You know that things aren’t going your way when you make $10.9 billion in a quarter and still have to face declining overall sales numbers. This is the strange tale surrounding Amazon and its revenue figures for the third quarter of 2011.
The weird thing about the Q3 earnings is that there was actually a 44% jump in net sales of $10.88 billion on Q2; where Amazon fell down was in the net income bracket. The retail giant recorded a 63% dip in net income, finishing off at $63 million. Amazon recorded a rather low operating income of $79 million in Q3—I say rather low, because operating income in the corresponding quarter of 2010 was a whopping $268 million.
Amazon’s mixed bag of results could be due to a slowing economy, which naturally would impact on online sales. But experts are not pointing to this as the main cause of Amazon’s decline in net revenue. If anything many are upbeat, thanks in part to the Kindle. Amazon has been slashing prices on older model Kindles and putting its full marketing weight behind its latest offering, the Kindle Fire.
When all is said and done though, the company is in good shape insofar has working capital is concerned. The company is reporting a cash in hand balance of $2.8 billion, which given the state of the economy in general, isn’t bad at all.
Do you think Amazon can recover from the slow growth in operating income? Share your thoughts in the comments below.