Total revenue at Amazon rose 22% in the second quarter ended June 30, to $15.70 billion, the same rate of gain posted in the first quarter, while operating income fell 26%, to $79 million. Sales in the worldwide media segment rose 7%, to $4.40 billion, while revenue in the electronics and other general merchandise segment jumped 28%, to $10.41 billion. The company posted a $7 million net loss in the quarter compared to net income of $7 million in the second period of 2012. Amazon had forecast sales growth in the quarter of between 13% to 26%.
As was the case in the first quarter, Amazon’s 10 top selling products in the second period were all digital products—Kindles, Kindle Fire HDs, accessories and digital content. “We’re so grateful to our customers for their response to Kindle devices and our digital ecosystem,” said CEO Jeff Bezos in a statement. In the conference call with analysts, CFO Tom Szkutak said that overall, digital units are "growing very fast relative to physical units" helped by the increasing number of digital exclusives offered through Kindle.
The company had a long list of second quarter accomplishments including totaling up all the digital items that are now available for sale through its ecosystem including books, videogames, apps, audiobooks and magazines. More than 350,000 e-books, Amazon noted, are available only through its Kindle store. Szkutak noted that the ability to offer exclusive content on the book side "is very interesting." The Kindle Fire HD and Kindle Fire HD 8.9” are now available in over 170 countries and territories, the company noted. Countries where different types of Kindles were made available in the period include China, Canada, and India.
Media sales were much stronger in North America than in international markets; North American media sales increased 16% in the quarter, while international sales did something rare in Amazon's history--fell 1%. Excludng the impact of currency exchange, international media sales would have been up 7%. North American egm sales increased 31% compared to 22% in the international markets.
For the first six months of 2013, revenue was up 22%, to $31.78 billion, and operating earnings fell to $260 million from $298 million in the first half of 2012. Capital expenditures in the last 12 months were $4.2 billion, including $1.4 billion to buy its corporate headquarters. The company showed little sign of slowing down its investments with at least five new fulfillment centers planned for the U.S. this year and significant investments being made in its web services business, AWS.
For the third quarter Amazon expects sales growth of between 12% and 24% and an operating loss of between $440 million and $65 million.