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    Rising Above the Economic Gloom, Amazon Pulls an Apple

    By Aaron Task | Daily Ticker – Wed, Jul 27, 2011 2:15 PM EDT

    The stock market was looking a little sickly Wednesday, which makes Amazon.com's rally all the more impressive. In recent trading, shares of the online retailer were up 4.7% to $224.19.

    The session is a microcosm for the prior quarter, where Amazon bucked an economic slowdown to post stellar second-quarter results, featuring a whopping 51% year-over-year increase in revenues.

    At 41 cents per share on revenue of $9.91 billion, Amazon's results handily beat Wall Street estimates, as did the company's third-quarter revenue guidance. The firm's operating income guidance was a disappointment but, for now, the company is being given credit for investing aggressively in the Kindle, more distribution centers and tactical acquisitions.

    Citing Morgan Stanley analyst Scott Devitt, Om Malik notes Amazon is on a similar growth path as Wal-Mart was 20 years ago. A more modern comparison might be Apple, which similarly produced blockbuster results in a soft economy. (See: Running Out of Words to Describe How 'Awesome' Apple Is)

    As Henry and I discuss in the accompanying video, Apple and Amazon appear more than ever to be on a collision course as they, along with Google and Facebook, battle for consumers' hearts, minds and wallets.

    Aaron Task is the host of The Daily Ticker. You can follow him on Twitter at @atask or email him at altask@yahoo.com

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    10 comments

    • James
      James  •  10 months ago
      The sales numbers are impressive - the states will find a way to tax soon and kiss that advantage GOODBYE
      • Raleigh
        Raleigh 10 months ago
        I've made several purchases from Amazon in the last year, and not one time would paying state sales tax changed my purchase decision.
      • Al
        Al 10 months ago
        Then, I will just buy directly from international sellers. If that does not work, then I will buy from an Indian reservation. If that does not work, I will just buy off Craig's list. If that does not work, build a peer-to-peer exchange. I will do anything to avoid taxes and helping our government. Our government is good at kicking people when they are down, so I say kick back.
      • STEVE
        STEVE 10 months ago
        Al, please stay off my roads, and don't use my fire or police services, or my food safety services, or my...
    • scott b
      scott b  •  10 months ago
      amazon is nothing short of brilliant. they are going to be a model for corporations of the 21st century
      • MichaelB
        MichaelB 10 months ago
        Seriously? The model for the 21st century is razor thin margins and tiny profits (relative to investments they have made)? I mean I buy from AMZN and I currently own some stock, but if they are a model for the 21st century seems a bit of a stretch. As for the author premise..... they are about the opposite of Apple in every measure other than they set expectations low and then have a "blowout" earnings report. Just like every quarter though AMZN has an excuse for why their margins are a disapointment. Eventually investors will demand a return on their equity though and will be done with excuses.
    • Bunkareeno
      Bunkareeno  •  10 months ago
      It's hard to justify shopping anywhere other than Amazon unless you enjoy paying more and paying taxes.
      • Phillip
        Phillip 10 months ago
        You're legally obligated to pay the taxes at the end of the year, Amazon just doesn't automatically collect them, which gives them an unfair advantage over retail.
    • GrowlinW
      GrowlinW  •  10 months ago
      Gotta love Amazon. Jeff Bezos might be the greatest CEO in history. They're changing the world.
      • STEVE
        STEVE 10 months ago
        But are they making it better or worse?
    • JohnW
      JohnW  •  10 months ago
      Are investors nuts? Amazon has a P/E ration of 97! A $50 stock price makes more sense than the current $200+
    • anonymous
      anonymous  •  10 months ago
      I love Amazon and millions do, it's the best online retailer, has the best distribution, the most selection, usually has better prices, has great streaming for music and movies, has great ebooks and kindle, serves rich and poor alike. I like downloading movies from them better than Netflix. It's just a great company.
    • Al
      Al  •  10 months ago
      I am sick of trading precious metals. I want to trade heroine, cocaine, people, disease, and organs as commodities, too.
    • Bob K
      Bob K  •  10 months ago
      I like Amazon, it's a trustworthy site where you can get almost anything you want, though the tax stuff will cut into their profits a little bit. Still, I'd shop there with or with additional tax-related costs.
    • Jaysun
      Jaysun  •  10 months ago
      Amazon is great: their prices are almost always the best even with shipping, the consumer is usually provided good information about the products, one-stop location to read all the best reviews which are other consumer's reviews who are usually not biased, and sell almost anything. The kindle is just a plus, they don't need to produce anything to stay a profitable business. Apple may be great now, but the tech field can change rapidly. In the meantime, Amazon will be happy to help Apple sell its products ;)

      P.S. great to see Henry and Aaron hashing out another fine viewing clip.
    • Smitty
      Smitty  •  10 months ago
      I generally love them, but their site is starting to get more and more like ebay every day (in terms of clutter, difficult searching, and an "everything to everyone" mentality). For the first time in my adult life, I find myself shying away from some searches there and opting for finding items locally. Too many third-party sellers and too little information when trying to find more obscure items.

      OTOH, Prime shipping and free returns really closes the gap with local brick and mortar stores. Best $80/year you can spend...even if they didn't offer free streaming. Which they do!
     Post a comment

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    The Daily Ticker covers the most important business stories of the day -- the economy, investing, corporate leadership and politics. The Daily Ticker picks up where Tech Ticker left off and is hosted by Aaron Task, Henry Blodget and Daniel Gross. Often serious, sometimes irreverent and always interesting, The Daily Ticker gives viewers a unique take on the business world's most crucial stories.

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