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July 25, 2014

Amazon records loss of $126m despite 23% sales growth

Amazon’s new venture in 2014 includes e-book rental, streaming service and set top box.

By CBR Staff Writer

Retail firm Amazon has reported a $126m loss during the second quarter of 2014 despite a 23% increase in its revenue.

The US-based retailer’s sales grew to $19.34bn, while its operating margin was 0.1% when compared to the 0.7% in the first quarter of 2014.

Amazon’s cloud computing division also suffered a slowdown due to competition from Google and Microsoft’s cloud platforms.

Amazon has also been in conflict with publishers over ebook pricing and has had aproblem with Warner Bros that led the company to stop orders of some popular movies.

Amazon Web services recorded sales of $1.17bn in the second quarter which is less compared to the $1.2bn generated in the first quarter of 2014.

The online retailer is forecasting an operational loss of between $410m-$810m, and is expecting revenue of $19.7bn- $21.5bn in its third quarter, which is 26% higher when compared to the revenue earned by the company in the corresponding quarter of 2013.

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The company is also focusing on growing its warehouse by constructing new ones to increase to provide steady and speedier delivery.

Amazon CEO Jeff Bezos said: "We’ve recently introduced Sunday delivery coverage to 25% of the U.S. population, launched European cross-border Two-Day Delivery for Prime, launched Prime Music with over one million songs, created three original kids TV series, added world-class parental controls to Fire TV with FreeTime, and launched Kindle Unlimited, an eBook subscription service.

"For our AWS customers we launched Amazon Zocalo, T2 instances, an SSD-backed EBS volume, Amazon Cognito, Amazon Mobile Analytics, and the AWS Mobile SDK, and we substantially reduced prices.

"And today customers all over the U.S. will begin receiving their new Fire phones — including Firefly, Dynamic Perspective, and one full year of Prime — we can’t wait to get them in customers’ hands."

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