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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.
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