Amazon Q3: they mention e-books, and the stock goes up 😉
Regular readers know, I don’t claim to have any special expertise in predicting the stock market, and especially in how investors will react to an Amazon financial call. The stock often goes down when Amazon produces results which are very much what I would expect them to do.
Yesterday, Amazon did one of their financial results call (this one for Q3 2017). Sales were up 34%.
They mentioned the growth of subsers (subscription services), specifically mentioning e-books. That means
Kindle Unlimited (at AmazonSmile: benefit a non-profit of your choice by shopping*)
They also mentioned how big
Prime Day (at AmazonSmile: benefit a non-profit of your choice by shopping*)
was, and how sales were apparently affected by it throughout the month.
However, I went back to my thoughts on the last report:
Amazon’s Q2 2017 Financials: Okay, investors, I get it this time
and they mentioned both of those last time, too!
AWS (Amazon Web Services) was way up, but that’s not anomalous either.
It’s probably because they did better than expected, but it’s always a bit odd to me that investors reward a company because the investors guessed wrong. 😉
The Q&A (Question and Answer) is always the most interesting part to me, and that was true this time, too. I will say that it felt quite relaxed, and the focus was where I, as a customer, would like it to be. It was about subsers, and Whole Foods, and Alexa, and investing in Prime Video (without an intent to add ads to it).
Investors liked it. According to this
the stock price went up 8.76% on Thursday. It’s up over 40%(!) overall this year.
I’ll be interested in hear what some of my more stock savvy readers have to say (which they can do by commenting on this post…I welcome comments), but I will say something.
Remember when Amazon was a bookstore that sold individual books to people?
What people see as Amazon’s strengths now really don’t have to do with that…and they are innovations, risks, and expensive investments. Web service, subsers, Whole Foods, and talktech…none of that connects to the kind of bookselling I did when I managed a brick-and-mortar bookstore. Amazon brick-and-mortar bookstores, while probably performing largely performing as expected, are not positioned as a profit engine.
That’s one of the thing that gives me confidence in Amazon (knock virtual wood). At least under Jeff Bezos, its success is not dependent on a single product or even a single market. It’s the philosophy of the company that makes it work, and that’s always been true.
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* I am linking to the same thing at the regular Amazon site, and at AmazonSmile. When you shop at AmazonSmile, half a percent of your purchase price on eligible items goes to a non-profit you choose. It will feel just like shopping at Amazon: you’ll be using your same account. The one thing for you that is different is that you pick a non-profit the first time you go (which you can change whenever you want)…and the good feeling you’ll get. 
Shop ’til you help!
This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.
I Love My Kindle 
October 28, 2017 at 4:33 pm |
For a change, I didn’t listen to the call (a lot of other things going on that day). I did notice that free cash flow (after all ongoing commitments are accounted for) had gone negative. This is perhaps the most important statistic for retail businesses. But then again Amazon is no longer a strictly retail business, and their business model is so off the normal charts so who knows.
As three (Amazon, Google, Microsoft)of the big five tech companies reported earnings on that day (the other two being Apple and Facebook), and given that the three reports (each in its own way) were blowouts, I wonder what impact this might have on the wider non-investor world. There is a concern in some circles (especially in the EU) that bigness is ipso facto bad. US antitrust is focused only on harm to consumers (and that is hard to prove when so many of the big 5 offerings are offered for free — and when polled consumers don’t seem to be negatively disposed to bigness per se).
I also was thinking about how these companies prepared for the upcoming holiday sales season. Two, Apple & Google, held big flashy events announcing their new stuff. Microsoft and (especially) Amazon seem to be content to announce things in dribs and drabs over the past several weeks. I wonder if they are even yet done with the announcements. With Microsoft, we know there is at least one more announcement opportunity coming on October 31 in London. For Amazon? Certainly, all their existing product lines have been refreshed. There have even been a few out of left field (Key and the Cam come to mind). Are they done? One part of me thinks yes. All their announcements predated their 3Q earnings — so maybe the dribs & drabs are just a lead-in to the earnings report. OTOH, it’s Amazon so who knows — I could do with an off the wall announcement or two 😀 .
October 30, 2017 at 1:13 pm |
Thanks for writing, Edward!
Yes, it’s a good time for the tech giants! Well, a good time in the USA: as you know, there have been tax charges in some other places.
As you know, I suspect Amazon may announce something big in the VAM (Virtual/Augmented/Mixed/Merged Reality) area, which you prefer, I believe, to just call “Mixed Reality”. I think it may happen November 19th or thereabouts, to echo (so to speak) the revolutionary introduction of the Kindle.