Amazon.com, Inc. (AMZN): Growth Before Profits?

Right from the time Amazon.com, Inc. (NASDAQ:AMZN) came out with its second quarter results after the bell yesterday, the discussion on the Street seem to be focused on why the company can’t post a profit even though its revenues grow quarter after quarter. To make matters worse this quarter, Amazon.com, Inc. (NASDAQ:AMZN) also gave a grim outlook for the third quarter acknowledging that the losses could go up much higher.

Amazon.com, Inc. (NASDAQ:AMZN)

Colin Gillis, Senior Tech Analyst at BGC partners was seen discussing Amazon.com, Inc. (NASDAQ:AMZN)’s business strategy and second quarter loss with Bloomberg’s Cory Johnson, Adam Satariano and Emily Chang on ‘Bloomberg West’. Mr. Gillis believes that investors of Amazon.com, Inc. (NASDAQ:AMZN) are getting increasingly concerned that even though the company’s revenue are growing, it’s not able to generate any profits.

“It has changed to a new trading pattern this year and again we’ll see if the losses stick, but you know Amazon is down before the print [quarterly results] it was down 10% year to date, it is significantly underperforming the marketplace, the broader market and the snapback after each quarter because you know people look at the potential that Amazon has. If they could only drive a little bit of margin on their revenue, it will be quite meaningful, but this new investment cycle with the tech and the content, these investments are going to be ongoing. They are not necessarily going to get the leverage that investors were hoping for,” Mr. Gillis said.

Mr. Johnson highlighted the fact that the earnings of Amazon.com, Inc. (NASDAQ:AMZN) has been dismal because there has been a price war going on in the cloud computing market, where Amazon.com, Inc. (NASDAQ:AMZN) is a big player with its AWS (Amazon Web Services). He added that Amazon.com, Inc. (NASDAQ:AMZN)’s habit of disclosing much less information that is expected from it is also taking a toll on the company’s investors.

“It’s legal what they are doing, but they disclose very little about some really important things like how big is AWS? What are the revenues for this business? God forbid what are the profit margins for that business and how do they differ from the other margins […],” Mr. Johnson said.

Disclosure: None

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!