amazonlogo11Amazon’s second quarter earnings just posted and the Seattle online giant reported a net loss of $7 million, or $0.02 per diluted share in the second quarter of 2013. That missed analyst estimates, which expected Amazon to post $28.3 million in net income.

Sales in Q2 increased 22 percent to $15.7 billion, which is up from $12.83 billion at this time last year. Analysts expected $15.74 billion in sales, so Amazon just about met expectations there.

Operating income fell 26 percent to $79 million in the Q2, compared with $107 million at this time last year.

Amazon’s stock, meanwhile, has jumped 20 percent this year alone and hit an all-time high earlier this month. It was down two percent in after hours trading today.

Jeff Bezos.
Jeff Bezos.

In the earnings release, CEO Jeff Bezos said he was “grateful to our customers for their response to Kindle devices and our digital ecosystem,” and also mentioned the success of Prime Instant Video and Kindle FreeTime Unlimited.

There is a lot going on right now for Bezos and his company. For starters, there’s the long-awaited Amazon Fresh grocery delivery business that just expanded to California. The company is also investing in more geographies, with Amazon India as a new addition just this month.

On top of that, Amazon is more or less taking over the South Lake Union area of Seattle, a once gritty section of the city north of the downtown core. The company has several construction plans for the Denny Triangle neighborhood, including three skyscrapers totaling some 3.3 million square feet. As part of that development, Amazon is looking to build a massive spherical greenhouse-like structure.

amazonhq-3
Amazon is looking to build a massive spherical greenhouse-like structure in Seattle’s South Lake Union area.

Bezos held the annual shareholders meeting in May, and opened up by saying the company is “incredibly lucky” to have 209 million active customers — people who have purchased something from Amazon in the last 12 months. He then reiterated his famous line about it being “Day One” for the company, with a new twist.

“In fact, I believe that the alarm clock hasn’t even gone off yet,” he said. “We’re still asleep in our beds, far from having even pressed the snooze button.”

Amazon’s worldwide headcount is also on the rise, with the company now at 97,000 employees as of today.

Stay tuned for more: The company’s earnings conference call is coming up at 2 p.m. Here’s an extended excerpt from the earnings news release.

SEATTLE–(BUSINESS WIRE)–Jul. 25, 2013– Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results for its second quarter ended June 30, 2013.

Operating cash flow increased 41% to $4.53 billion for the trailing twelve months, compared with $3.22 billionfor the trailing twelve months ended June 30, 2012. Free cash flow decreased 76% to $265 million for the trailing twelve months, compared with $1.10 billion for the trailing twelve months ended June 30, 2012. Free cash flow for the trailing twelve months ended June 30, 2013 includes fourth quarter 2012 cash outflows for purchases of corporate office space and property in Seattle, Washington, of $1.4 billion.

Common shares outstanding plus shares underlying stock-based awards totaled 474 million on June 30, 2013, compared with 468 million one year ago.

Net sales increased 22% to $15.70 billion in the second quarter, compared with $12.83 billion in second quarter 2012. Excluding the $392 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales grew 25% compared with second quarter 2012.

Operating income decreased 26% to $79 million in the second quarter, compared with $107 million in second quarter 2012. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating income was $18 million.

Net loss was $7 million in the second quarter, or $0.02 per diluted share, compared with net income of $7 million, or $0.01 per diluted share, in second quarter 2012.

“We’re so grateful to our customers for their response to Kindle devices and our digital ecosystem. This past quarter, our top 10 selling items worldwide were all digital products – Kindles, Kindle Fire HDs, accessories and digital content,” said Jeff Bezos, founder and CEO of Amazon.com. “The Kindle service keeps getting better. The Kindle Store now offers millions of titles including more than 350,000 exclusives that you won’t find anywhere else. Prime Instant Video has surpassed 40,000 titles, including many premium exclusives like Downton Abbeyand Under the Dome. And we’ve added more than a thousand books, games, educational apps, movies and TV shows to Kindle FreeTime Unlimited, bringing together in one place all the types of content kids and parents love.”

Financial Guidance

The following forward-looking statements reflect Amazon.com’s expectations as of July 25, 2013, and are subject to substantial uncertainty. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and consumer spending, world events, the rate of growth of the Internet and online commerce and the various factors detailed below.

Third Quarter 2013 Guidance

  • Net sales are expected to be between $15.45 billion and $17.15 billion, or to grow between 12% and 24% compared with third quarter 2012.
  • Operating loss is expected to be between $440 million and $65 million, compared to $28 million in third quarter 2012.
  • This guidance includes approximately $340 million for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional business acquisitions, investments, restructurings or legal settlements are concluded and that there are no further revisions to stock-based compensation estimates.

A conference call will be webcast live today at 2 p.m. PT/5 p.m. ET, and will be available for at least three months at www.amazon.com/ir. This call will contain forward-looking statements and other material information regarding the Company’s financial and operating results.

Previously on GeekWire: An open letter to Jeff Bezos: A contract worker’s take on Amazon.com 

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