Amazon (NASDAQ:AMZN) reported yet another unprofitable quarter as net losses reached $437 million, up from $41 million in the same period 2013. The continuing losses, due in large part to acquiring and launching new products and services, have left investors wondering if the company is at all concerned about the financial bottom line.
While sales were up 20 percent to $20.6 billion for the quarter, that did not make up for the $544 million in operating losses.
As a result of the announcements, Amazon's stock took an 11 percent nose dive in after-hours trading, reported Forbes. The drop may signal that investors are tired of Amazon's non-responsive approach to the bottom line. While the company has been in full-out acquisition and growth mode, it's failed to make up for widening losses.
It's been a busy growth year for the retailer. Earlier this year, Amazon began selling new electronic gadgets through its wearable technology store and purchased video game streaming site Twitch for $1 billion. It also launched a smartphone, the Fire Phone, which thus far has not been very successful. Just this month, Amazon expanded its grocery delivery service to include the Brooklyn, New York area. The company even announced it would soon be opening its first physical store in New York City. The list goes on.
In a call with financial members, Amazon was inundated with questions about what was important to the company and its board. Aram Rubinson, from Wolfe Research, put the question on the table: "Which financial measures do you hold yourselves and the board hold you accountable to because it's a little hard to see any of them making positive progress?"
The response from CFO Tom Szkutak was once again that the e-commerce retailer is focused on long term investments.
"We're looking at a number of different metrics over a long period of time and certainly where our goal is to maximize free cash flow over the long term, we don't focus on individual margins, but we do focus on the inputs that are going to help drive free cash flow and operating income," he said.
"We've certainly been in several years now what I'd call an 'investment mode' because of the opportunities that we've had in front of us," added Szkutak.
-See this Seeking Alpha transcript
-See this Amazon press release
-See this Forbes article
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