This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Amazon Keeps Rolling on Cash Flow

International revenue was $6.79 billion, and Amazon had almost as many media sales, $2.42 billion, outside North America as inside, where it was $2.61 billion.

Analysts insisted on asking about Amazon's raising the threshold on free shipping to $35 per order, but online delivery is always free, and Amazon's Prime customers are also getting access to more free content than most viewers (like me) can actually watch. (I'm currently enjoying an old BBC series titled "Foyle's War" -- Sherlock Holmes is a cop during World War II.)

Amazon has enormous room to grow. It's just now delivering e-books in languages other than English, in quantity. Pessimists love to focus on the TV side of the house, but the delivery of e-books, and cheap, high-quality e-book readers, is actually a bigger growth area, especially outside North America.

And we haven't even talked about cloud. Amazon doesn't break out cloud revenues, lumping them instead into a segment dubbed "other." But net services sales, which includes both cloud and media fulfillment, were up from $2.26 billion a year ago to $3.28 billion this year. My calculator shows that's a gain of 45%.

So you have the cost of sales declining over time, as more sales become electronic. You have sales growing at a rate that's still unheard-of for a retailer, and a company that can finance all that growth with cash flow, including the cost of real estate and technology. You have a company that's doubling its volumes every two years, despite the numbers growing into the $60-70 billion range.

Amazon can turn on the profit spigot at any time, in other words, but it's still financing its growth from operations. Any wonder that a stock that closed on Thursday at $332 was trading for more than $360 at about 1 p.m. EDT Friday.

At the time of publication, the author had no positions in stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Dana Blankenhorn has been a business journalist since 1978, and a tech reporter since 1982. His specialty has been getting to the future ahead of the crowd, then leaving before success arrived. That meant covering the Internet in 1985, e-commerce in 1994, the Internet of Things in 2005, open source in 2005 and, since 2010, renewable energy. He has written for every medium from newspapers and magazines to Web sites, from books to blogs. He still seeks tomorrow from his Craftsman home in Atlanta.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AMZN $659.59 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs