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Thread: Amazon sales rise, but profit comes up short

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    Franc Tireur's Avatar
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    Amazon sales rise, but profit comes up short

    Amazon's stock fell 5.7% in after-hours trading Tuesday after the company reported first-quarter earnings that fell by one-third compared to a year earlier -- and sharply missed Wall Street forecasts.
    After the bell Tuesday, Amazon (AMZN, Fortune 500) reported that its net income in the first quarter fell to $201 million, or 44 cents a share, compared to last year's $299 million. Analysts polled by Thomson Reuters were looking for earnings of 61 cents a share.

    Amazon's sales during the quarter rose 38% to $9.9 billion, beating analysts' estimates of $9.5 billion.
    Shares fell nearly 6% after hours as investors were rattled by the earnings miss, but they had recovered a bit, to a 2% loss, by 6 pm. ET. Amazon shares have been sluggish in 2011, rising only 1.3% year-to-date as of Tuesday's close, even as the broader market has rallied.
    Investors also looked to a partially downbeat forecast for the second quarter. Amazon expects sales of $8.9 billion to $9.7 billion, but it expects its operating income to decline.
    Amazon sales rise, but profit comes up short - Apr. 26, 2011

    Amazon one of the biggest online retailer expect its operating income to decline?

    What a pessimistic perspective...
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    Franc Tireur (27 April, 2011)

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    The problem with this kind of hybride operations, half retailer and half marketer is to find out where come from the 32.8 percent decline.

    We have seen a major decline too in our operation and I can say that it is extremely difficult to take a specific direction, because in this kind of economy if you take the wrong decisions, it could be fatal for the business.
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    Wal-Mart: Our shoppers are running out of money

    Wal-Mart's core shoppers are running out of money much faster than a year ago due to rising gasoline prices, and the retail giant is worried, CEO Mike Duke said Wednesday.
    "We're seeing core consumers under a lot of pressure," Duke said at an event in New York. "There's no doubt that rising fuel prices are having an impact."

    Wal-Mart shoppers, many of whom live paycheck to paycheck, typically shop in bulk at the beginning of the month when their paychecks come in.
    Lately, they're "running out of money" at a faster clip, he said.
    Wal-Mart shoppers running out of money - Apr. 27, 2011

    Do you really believe that the economy is recovering?
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    My viewpoint on the economy?
    It sucks to be poor, middle class!

    The price of gasoline does have, despite what those funky government yahoos say or those pie in the sky economists say, a direct impact on the economy recovering.
    When a person has to pay $60 to fill up a vehicle, that is a bunch of money that will not go for food.
    Then when a person goes to the grocery store and has to pay ever increasing prices of even just the basics, then at some point they can not buy as much.

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    Hmmm, I wonder if online purchasing is seeing a similar trend as the WalMart article points out of tailing off well before the end of the month now too?

    $60....I filled up in Holland two weekends ago...ran me about $150 for 13ish gallons (they do liters here so that's a rough)....still see plenty of folks driving though...I think people are skipping meals and pushing bills to make up for the high gas prices personally.

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    I will say: "What goes around comes around"

    Corporations are starting to feel the pain of their own policies. The wages have never been increased like they should be, and the hyper inflation on food and commodities are doing the final job unfortunately.

    In Europe we have a lot of social safety nets, so it will always be less painful than in US or other countries.

    The core of the US population is the middle class and sadly they are the most affected by this economic crisis, next who knows who will be affected.
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    I wouldn't bet against Amazon in the long term. As the market leader, they are in a better position than almost anyone to weather price-sensitive market conditions. Due to their scale and their technology, they can reduce costs better than their competitors.

    The government is screwing up the economy for almost everyone but the financial industry. However, the squeeze that the retail industries are suffering will end up hurting Amazon less than it hurts their competitors.
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    I noticed that Amazon is playing around with pricing much more than I've seen in the past. They have always priced to the market for some of the products that they purchase and sell, which means that someone in New York may see a different price than someone in Arkansas. What I've noticed lately if that I can view a product on Monday and it might be priced at $24.95. If I go back on Tuesday it might be $28.95 or $29.95. But if I wait a week it is usually back to $24.95.
    "Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote." -- Benjamin Franklin


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    Quote Originally Posted by Will.Spencer View Post
    I wouldn't bet against Amazon in the long term. As the market leader, they are in a better position than almost anyone to weather price-sensitive market conditions. Due to their scale and their technology, they can reduce costs better than their competitors.
    Perhaps Amazon is lowering their margin to expand the market share. I wonder also whether the Japan disaster had any effect. THere's shortgages of some higher end products like camera lenses.

    Quote Originally Posted by Will.Spencer View Post
    The government is screwing up the economy for almost everyone but the financial industry. However, the squeeze that the retail industries are suffering will end up hurting Amazon less than it hurts their competitors.
    The economy actually is in a sweet spot right now. Most likeky the US will have a couple of years of "good times" similar to the Jimmy Carter years of 1978/1979. Historically, the US averages a recession every 4-6. So, 2013 could be a worse recession than 2007-2009. There just isn't any 'economic bullets' or money left.

    Quote Originally Posted by javanx3d View Post
    Hmmm, I wonder if online purchasing is seeing a similar trend as the WalMart article points out of tailing off well before the end of the month now too?

    $60....I filled up in Holland two weekends ago...ran me about $150 for 13ish gallons (they do liters here so that's a rough)....still see plenty of folks driving though...I think people are skipping meals and pushing bills to make up for the high gas prices personally.
    Europe is a rough comparision. The prices really aren't too bad when they are in Euros. The Euro at one point was $0.95 and now it's like $1.50.

    Though in Europe it's much easier to live on a little money. A lot of the taxes are VAT. So, if you live in a one room apartment and live off of wine/pasta/bread and local fruits/vegetables, you could actually survive.

    In Russia though it's getting bad:

    Abandon All Hope: The Russian Region That's Been Left to Die - Yahoo! News


    Quote Originally Posted by iowadawg View Post
    My viewpoint on the economy?
    It sucks to be poor, middle class!

    The price of gasoline does have, despite what those funky government yahoos say or those pie in the sky economists say, a direct impact on the economy recovering.
    When a person has to pay $60 to fill up a vehicle, that is a bunch of money that will not go for food.
    Then when a person goes to the grocery store and has to pay ever increasing prices of even just the basics, then at some point they can not buy as much.
    Quote Originally Posted by Natural Elements View Post
    I will say: "What goes around comes around"

    Corporations are starting to feel the pain of their own policies. The wages have never been increased like they should be, and the hyper inflation on food and commodities are doing the final job unfortunately.

    In Europe we have a lot of social safety nets, so it will always be less painful than in US or other countries.

    The core of the US population is the middle class and sadly they are the most affected by this economic crisis, next

    Middle class is a poor description. What I mean is that everyone says that the are middle class. I'm not poor and I'm not rich. I must be middle class. I like middle income better. What's happening now is that the working class isn't making a middle income salary like in the old days and the aveage American lives anove what they produce. You add to that, 40 million Americans live on foodstamps and three strikes you're.

    Also, corporate profits don't tell the real story of how bad it is. 50% of the profits of S&P 500 are made abroad.

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