Lots of price cutting and lower shipping charges to consumers may have the online retailer ready to turn the corner.
Earnings news for online retailer Amazon.com showed a drop in profits compared to the same quarter last year. But boosts in sales and operating margins seem to indicate better things in store for the company.
In a statement, Amazon said it earned 12 cents per share for its second quarter, or $52 million USD. That’s a decrease from the same period last year, where the company earned $76 million, or 18 cents a share.
The change comes from increased operating expenses and its early adoption of new accounting rules governing stock-based compensation. Even with the drop, Amazon still beat analyst expectations of 10 cents per share.
Net sales for Amazon increased to $1.75 billion for the quarter, compared to $1.39 billion in the last-year quarter. Free cash flow, a figure used by some investors to better assess a company’s health, increased 37 percent to $486 million over the trailing 12 months.
The company debuted a two-day shipping plan, Amazon Prime, that customers can purchase for a flat annual rate of $79. “Amazon Prime members love getting unlimited two-day shipping for free with no minimum order size,” said Jeff Bezos, founder and CEO of Amazon.com, in the statement.
“Though expensive for the company, Amazon Prime creates a premium experience for customers who join, and as a result we hope they’ll purchase more from us in the long term.”
David Utter is a staff writer for murdok covering technology and business. Email him here.
