Leaping revenue, little profit. That is the long-established Amazon story, and those who expected to hear it again in late July as the company reported its second-quarter results were not disappointed.
The company reported net income of $7 million, or 1 cent a share, on sales of $12.8 billion.
Analysts had estimated the company would earn 2 cents a share, down from 41 cents a share in the second quarter of 2011. They expected revenue of $12.8 billion, up from $9.91 billion 2011.
Much of Amazon’s growth in recent years has come internationally — its sales outside North America were 44 percent of its revenue in 2011. The faltering world economy is presumably restraining growth a bit. There are also reports that Amazon has been struggling in a few key international markets, particularly China.
In recent quarters, Amazon has been cautious about its prospects. It warned it might lose money in the first quarter. When it did better than expected, analysts were relieved and the stock immediately rallied. But forecasts for the second quarter called for minimal profit even as revenue was predicted to jump.
Amazon has been a growth story ever since its founding in 1994. Its profits have purposely been either minimal or nonexistent. Instead, there has been relentless investment in such digital initiatives as the Kindle e-reader and its cloud computing business infrastructure as well as in physical warehouses.
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