Amazon reports losses in third quarter

Amazon reports losses in third quarter

Amazon reported a loss of $274million (£170m) in its third quarter, blaming an unfavourable impact on foreign exchange rates and losses on LivingSocial, the company’s investment daily deal company.

Analysts have also blamed the losses, down from earnings of $63 million a year earlier,  on the company’s investment in its Kindle e-readers and tablets, which founder and c.e.o Jeff Bezos has previously revealed the company sells for near to cost prices.

Announcing the company’s third quarter results to 30th September 2012, Bezos said: “Our approach is to work hard to charge less. Sell devices near break even and you can pack a lot of sophisticated hardware into a very low price point.”

Amazon also revealed its bestselling product worldwide was the $199 Kindle Fire HD. “Incredibly, this is true even as measured by unit sales,” Bezos said. The Kindle Fire tablets went on sale in the UK yesterday, including in Waterstones stores, but have been available to pre-order for around five weeks. The company’s second and third bestselling products are also Kindles, with the new Kindle Paperwhite in second position and the $69 Kindle in third. Its fourth bestseller is the third book in the Fifty Shades of Grey trilogy by E L James (Random House), Fifty Shades Freed, the company said.

Amazon increased net sales in its third quarter in comparison to its third quarter in 2011, growing revenue by 27% to $13.81 billion compared with $10.88 billion in third quarter 2011.

Operating cash flow at the company increased 8% to $3.37 billion for the trailing twelve months, compared with $3.11 billion for the trailing twelve months ended September 30, 2011.