“Amazon.com Inc.’s escalating pursuit of Apple Inc. squeezed its profit forecast for this quarter, prompting investors to erase as much as $11 billion from the company’s market value,” Danielle Kucera reports for Bloomberg.
“Amazon’s operations could lose $200 million in the fourth quarter as costs mount, the Seattle-based company said yesterday,” Kucera reports. “The shares fell 11 percent to $203.30 at 9:44 a.m. New York time, the biggest intraday drop since July 23, 2010.”
Kucera reports, “Amazon is selling its new Kindle Fire device for as low as $199 — less than half the price of Apple’s cheapest iPad. At that price, the company will lose $10 per device, research firm IHS Inc. estimates.”
MacDailyNews Take: “Less than half the price of Apple’s cheapest iPad.” The reporter should mention that the size of the Kindle Fire’s tiny screen is 45% that of Apple iPad’s, but does she? No.
“Chief Executive Officer Jeff Bezos, Amazon’s founder and largest shareholder, saw his stake lose as much as $2.2 billion in value. He reported holding 88.1 million shares as of Aug. 18,” Kucera reports. “Amazon’s operating results may range from a loss of $200 million to a profit of $250 million this quarter, the company said yesterday. Analysts were projecting a gain of $512.7 million on average, according to Bloomberg data. Sales will be $16.5 billion to $18.7 billion, Amazon said.”
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MacDailyNews Take: Even is a best case scenario, Amazon sure does a lot of work for relatively little profit: $18.7 billion in revenue to generate $250 million in profit. Last quarter, Apple posted revenue of $28.27 billion with a net profit of $6.62 billion.