During the first quarter, Amazon (AMZN) reported a significant loss in income—thirty-five percent. But even given that bleak outlook, Amazon stock fared relatively well. The online giant reported twenty-eight cents per share in the most recent quarter, making the overall profit close to one hundred and thirty million dollars.
These numbers are less than Amazon’s profits this time last year, but the loss is nowhere near as great as expected, given the recent income reports. In contrast with the low income, overall sales are up thirty-four percent from last year.
The new Kindle Fire might have something to do with the boost in Amazon’s numbers, as the best-selling item overall on the site. All of Amazon’s digital offerings did well—they made up ninety percent of the company’s overall best selling items.
As the top competitor for the Apple iPad and the Android-powered Nook, the Kindle Fire represents a less expensive, smaller option for customers for the “tablet” devices. After the release of the latest iPad, Kindle sales actually rose, probably given that the new iPad wasn’t a smaller tablet, as some had hoped it would be. At two hundred dollars, the Kindle gives consumers lots of the elements that the iPad offers, in a more economical package—in terms of both size and cost.
There seems to be a pattern in Amazon’s behavior—a pattern that, perhaps, investors are beginning to notice, too. When Amazon launches a new, relatively risky product like the Kindle, there is often a shaky period filled with lots of unknowns. However, the payoffs are often huge, as was the case with the Kindle.
Investors have confidence in the company in general, and may see the lower Amazon numbers as the perfect time to invest. Amazon’s continued strong presence in the online market, along with its continued release of new, innovative products, keeps its investors investing, in spite of some low periods.
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