Led by a 31% increase in sales in North America, total revenue at Amazon increased 24%, to $17.09 billion, in the third quarter of 2013 while its operating loss was $25 million, down from $28 million in the third quarter of 2012. Within its North America segment, media sales (home to, among other things, books and e-books) rose 18%, while sales in the electronics and other general merchandise segment, which includes Kindle, increased 33%. It was the “other” segment, however, that had the strongest gains in the quarter with sales jumping 58%; that segment includes its Amazon Web Services business, home to its cloud service.
Among the factoids tossed out in the Amazon press release: in the last 90 days Amazon has added 8 million sq. ft. of fulfillment capacity, while the number of KDP authors who have sold over a million copies rose to 14. In the question-and-answer session during its conference call, analysts brought up two other statements: Amazon said it signed up "millions" of Prime members in the quarter, and the deployment of 1,382 Kiva robots in three fulfillment centers. CFO Tom Szkutak didn't add much to the statements, acknowledging that the company was "excited" about the pace of Prime membership growth and added that retention of Prime members remains high. As for the Kiva robots, he said Amazon will monitor their performance to see if they improve productivity at the warehouses.
International sales grew slower than North America sales, up 15% with media sales up only 2% (9% excluding the impact of foreign exchange). Asked about the slow media growth abroad, Szkutak agreed with the suggestion that part of the reason was because of a higher base of device owners in North America compared to foreign markets. In any case, Amazon sees great opportunity in international markets, including China where Szkutak said the company believes there will be "many [e-commerce] winners."
Back in the U.S., Szkutak said it is still early in the Amazon Locker program where the company creates lockers in physical stores to allow customers to pickup products. Szkutak said the program is only being offered in a few locations (a few chains have dropped the lockers), but that if results warrant Amazon will expand the program.
For the fourth quarter, Amazon is expecting sales to increase between 10% and 25% and it may or may not make money; Amazon said it could have an operating loss as deep as $500 million or profits up to $500 million.
