Amazon Net Falls 96 Percent in Second Quarter
SEATTLE-In spite of a nearly 30 percent jump in net sales, Amazon.com's second-quarter net income plummeted 96.3 percent to $7 million in its fiscal second quarter, which ended on June 30.
Increases in operating expenses, interest expense and an enlarged provision for income taxes combined to hack away at the Internet giant's bottom line. Total operating expenses were up 48.1 percent in dollars and 318 basis points as a percentage of sales, to 25.2 percent. Interest expense climbed 40 percent, and the provision for income taxes was increased 122.4 percent. Included in the second-quarter numbers was a $65 million estimated net loss from its acquisition and integration of Kiva Systems, a provider of order-fulfillment systems.
Net sales in the quarter rose 29.5 percent to $12.8 billion. Included in this gain was a 36 percent pickup in sales in North America and a 22 percent increase in sales from Amazon's international segment. The company also reported a 198 basis-point increase in gross margin, to 26.1 percent.
For the third quarter, Amazon said it expects net sales to total between $12.9 billion and $14.3 billion, or 19 to 31 percent ahead of the third quarter of last year.