Infotech Lead America: E-commerce giant Amazon.com is likely to post operating loss of $340 million in second quarter of 2013 on net sales of around $14.5-$16 billion.
Amazon.com on Thursday, announcing the guidance for Q2, said net sales are expected to be between $14.5 billion and $16.2 billion, or to grow between 13 percent and 26 percent compared with second quarter 2012.
Operating income (loss) is expected to be between $(340) million and $10 million, compared to $107 million in the comparable prior year period.
In January 2013, Bloomberg reported that Amazon is investing across the company to boost the volume of products sold on its site, adding features to its Kindle line of e-readers and tablets and beefing up its inventory and shipping network.
The efforts may help Amazon gain share in a worldwide e-commerce market that Scott Devitt, an analyst at Morgan Stanley, estimated will reach $1 trillion by 2016, up from $512 billion last year, By then, Amazon’s share will be 23.5 percent, pushing net sales to $166 billion, he predicted.
Roadblocks in emerging markets such as Russia and Brazil have slowed the company’s international expansion, Devitt said. Consumers in Brazil often pay for online purchases through installments, while those in Russia wait until items are delivered to pay with cash, he said. That’s a stark contrast to the payments U.S. users make with one click of a mouse using credit cards on file with Amazon.
In Q1 2013, Amazon.com’s net sales increased 22 percent to $16.07 billion, compared with $13.18 billion in first quarter 2012.
In July 2012, TIME said Amazon’s most daring gambit, and the one that may position the company for the kind of earnings growth that the stock market expects, is its foray into business-to-business services. In recent years, Amazon has ramped up its “cloud computing” services, or its business of leasing out of server space in its large data centers around the world so that small businesses don’t have to risk such up-front capital investment.
But Amazon’s operating income decreased 6 percent to $181 million in the first quarter, compared with $192 million in first quarter 2012.
Interestingly, net income decreased 37 percent to $82 million in the first quarter, compared with $130 million in first quarter 2012.