Amazon Shock $264m Loss But Sales + 30%

Up but down: Sales are up 30% but Amazon reports q3 loss was $264 m

Sales at the e-tailer grew 30% to $13.81 bn but Amazon reported a q3 loss of $264 m, or $0.60 per diluted share, compared with $63m profit, or $0.14 per diluted share, q3 2011.

Rising operational costs and unfavourable changes in foreign exchange rates were partly to blame for the q3, loss as was a  $169m loss associated with LivingSocial impairment assets. 

“Our approach is to work hard to charge less. Sell devices near breakeven and you can pack a lot of sophisticated hardware into a very low price point,” said Jeff Bezos, founder and CEO of Amazon.com.

 “And our approach is working – the $199 Kindle Fire HD is the #1 bestselling product across Amazon worldwide.The next two bestselling products worldwide are our Kindle Paperwhite and our $69 Kindle. “

Amazon’s #4 bestselling product is book three of the Fifty Shades of Grey series.

 “And we haven’t even started shipping our best tablet – the $299 Kindle Fire HD 8.9″ ships November 20,” Bezos added.

The fawning over Kindle sales comes as Apple launched a rival iPad mini this week, which Amazon was quick to diss in a statement today.

Amazon’s international sales (including from sellers) were up 20% from q3 2011 to $5.92 billion and ‘Electronics and Merchandise’ sales grew 36% to $8.56 bn.

It is also developing 19 new fulfilment centres globally to cater for peak Christmas demand.

Operating cash flow increased 8% to $3.37 billion for the trailing twelve months. Free cash flow decreased one third to $1.06 billion for the trailing twelve months.

Other quarterly highlights include: a new licensing agreement with EPIX for movies including The Avengers, Iron Man 2, The Hunger Games, Super 8, Thor, and more, with Prime Instant Video to more than 30,000 movies and TV episodes

Q4 sales are forecast to grow between 16%-31%, or between $20.25 bn-$22.75 bn.

Operating income is expected to be anywhere between a loss of $490m or a profit of  $310 million, compared with $260 million in q4 2011.

Amazon’s top selling books included  The Mark of Athena (Heroes of Olympus, Book 3), The Casual Vacancy and No Easy Day: The Firsthand Account of the Mission That Killed Osama Bin Laden.