Amazon's losses narrow as third-quarter sales rose 24%

Net loss was $41 mn in the third quarter, or $0.09 per diluted share, narrowing from a net loss of $274 mn, or $0.60

Amazon.com Inc posted a narrower quarterly loss and grew sales by a better-than-expected 24 per cent on Thursday as it expanded aggressively at home and made inroads overseas, sending its shares up 8 per cent.

The revenue performance indicated strong momentum of the world's largest Internet retailer going into the crucial US holiday season, which some experts say could be the slowest in years.

Much of that growth came from its home market, where net sales leapt 31 per cent to $10.3 billion as a faster delivery by a growing network of distribution or fulfillment centres drove customer demand, Amazon said. International sales also expanded 15 per cent, up from 13 percent in the previous quarter.

Net loss was $41 million in the third quarter, or $0.09 per diluted share, narrowing from a net loss of $274 million, or $0.60

It posted revenue of $17.1 billion in the third quarter, up from $13.8 billion a year earlier. Analysts had expected it to post sales of $16.8 billion on average.

Amazon's gross profit margin - a closely watched measure of earnings that excludes several expenses - was 28.6 per cent in the second quarter, one of the highest in over a decade by analysts' reckoning.

Third-quarter profit margins came in about 27.6 percent, in line with what analysts had expected and down from the previous quarter as Amazon ramped up investments in preparations for the holidays.

Data firm ShopperTrak has forecast the slowest holiday sales growth since 2009, and last week, September retail sales showed U.S. shoppers were cautious, following a disappointing second quarter for many retailers. But unlike eBay, Amazon sounded upbeat on the coming shopping season.

"We're getting ready for an exciting holiday season and that includes having to make sure we have the right amount of employees, the right capacity in place," Szkutak said.

Shares in the company have gained 30 percent this year. It is now valued at 131 times 2014 earnings, among the highest in the market. In after-hours trading on Thursday, Amazon shares climbed to about $360 from a close of $332.21 on the Nasdaq.

"The takeaway is that the third-quarter sales shows that the Amazon value proposition is striking a chord with consumers," Hottovy said.