Content Marketing Blog

Amazon releases Q3 sales, announces tech and content investment

Global e-commerce brand Amazon has released its third-quarter sales earlier this week (October 25) and revealed some surprising results.

The company was keen to emphasis broad increases in the number of people purchasing recent product additions such as the Kindle Fire, Kindle Touch 3G, as well as the scaled down Kindles that are now retailing for less than US$100.

Amazon founder and chief executive officer Jeff Bezos commented on the sales, saying: "September 28 was the biggest order day ever for Kindle."

He also said: "In the three weeks since launch, orders for electronic ink Kindles are double the previous launch. And based on what we're seeing with Kindle Fire pre-orders, we're increasing capacity and building millions more than we'd already planned."

Net sale profits for the quarter were up 44 per cent and this led to the company taking US$10.88 billion – an improvement on last year's US$7.56 billion.

Tom Szkutak, chief financial officer at Amazon, indicated that the brands expanding consumer baseline would continue to grow and help boost profits in the future.

He asserted: "We expect to have a record quarter in terms of device sales in Q4."

Yet despite breaking previous sale records the brand also saw its year-on-year profits fall by 75 per cent.

In 2010, the company's third-quarter earnings reached US$231 million, however, this year the overall figure has dropped to US$63 million.

Reuters reports that the profit margins were also short of Wall Street estimates and within hours of the announcement shares were down 17 per cent.

However, according to e-commerce experts the results may be part of a business plan which would see Amazon position itself as a discount provider.

Reports the company spent $167 million on technology and content suggests that this quarters sale and profit figures may not be indicative of the brands real performance.

Szkutak said: "In terms of content, we will be purchasing content for both our U.S. business, for both our paid and unpaid (Prime) business in Q4."