Amazon.com Is Faster Than You Think

This isn't Amazon.com (Nasdaq: AMZN  ) at its best, but it should be good enough for you.

Net sales climbed 14% to $4.65 billion during the leading online retailer's latest quarter. If not for foreign currency fluctuations, that would have been a 20% surge. Earnings fell 10% to $0.32 a share, but back off, boo-birds. Amazon's bottom line was bogged down by a settlement with Toys "R" Us. Last year's quarter was also padded by a gain on the sale of its European DVD rental assets.

Since Amazon has evolved into an e-tailer of all trades, it provides a great way to take the pulse across various retailing categories.

For instance, North American media sales were essentially flat, but that's an incomplete snapshot. During last night's conference call, the company conceded that strength in book sales helped offset weakness in video-game software and consoles.

This is naturally bad news for GameStop (NYSE: GME  ) , but hold the confetti if you're in the Borders Group (NYSE: BGP  ) or Barnes & Noble (NYSE: BKS  ) camps. Amazon's success with its Kindle e-book reader is making Amazon an even bigger gateway for publishers.

Amazon still isn't ready to give up actual sales data on the Kindle. CEO Jeff Bezos was surprisingly absent from the call, but he's as tight-lipped as the rest of his executives in discussing actual Kindle sales anyway.

Amazon also discussed this week's acquisition of Zappos. It sidestepped the question about whether the purchase was dilutive or accretive to earnings, but place your bets on the side of dilution in the near term. According to Amazon, Zappos posted "a small profit" on $635 million in revenue.

The Zappos deal is still a smart one for Amazon, in that it lands a premium online brand before it grows any bigger. Amazon still has the muscle to be an organic sprinter, but a few tactful acquisitions will only enhance the company's killer speed.

Other headlines to rock out to:

Amazon.com and GameStop are Motley Fool Stock Advisor selections. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz has been shopping online for about as long as Amazon.com has been in business. He owns no shares in any of the stocks in this article and is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


Read/Post Comments (1) | Recommend This Article (11)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 949770, ~/Articles/ArticleHandler.aspx, 10/26/2014 12:54:47 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Advertisement