The online retailer ended up with net profits of 14 cents a share — a far cry from the 24 cents that the Street expected. The company reported net income of $63M, down 72.7% vs last year’s 3Q, on revenues of $10.9B, up 43.9%. And Amazon says that in 4Q it could deliver anything from a $200M operating loss to a $250M operating profit. Confused? So are a lot of analysts, judging by the questions they asked in Amazon’s earnings call. The company didn’t even try to explain the lousy 3Q results in its press release. But the big surprise seems to be how much Amazon had to spend, in large part for new fulfillment centers and to prepare for the recent release of its Kindle Fire tablet. CEO Jeff Bezos says that orders for the device are so strong that the company plans to make “millions more” than it planned.


The Kindle Fire is not a recent release, it doesn’t come out until the middle of November and is most likely the reason profit was so low, especially if Amazon is selling the Fire at a loss in order to take a hold of the market and control digital retail sales, much like Apple currently is doing with the iOS devices. At $200 a pop even a million is costing Amazon around $200 million to produce, so depending on how many they are making they could have spent over a billion just on making sure they have enough to meet demand.