Amazon: Squint a bit and the results look like a profit

Amazon.com has announced third quarter results which show net losses dropped steeply while its revenue soared.

The e-tail giant posted a net loss of $35m, or nine cents per share, on sales of $851m. This compares to losses of $170 million, or 46 cents per share, on $639m in sales for the comparable period last year.

On a pro forma basis, which excludes the amortisation of goodwill, stock-based compensation and restructuring expenses, Amazon posted a profit of $400,000 - or one cent per share. Wall Street analysts surveyed by First Call expected the company to lose four cents per share on this basis.

Amazon was able to improve its results based on its pricing strategy, Jeff Bezos, the company's chief executive officer, said in a statement.

"We've lowered prices five times over the last 15 months, and simply put, it's working," he said.

Amazon saw its shipping revenue stagnate and losses mount as a result of a free-shipping offer, said Mark Peek, the company's chief accounting officer. The e-tailer's shipping services lost $10m on $73m in revenue in the quarter, compared with a loss of $2m on $74m in revenue in the year-ago period.

"We're trading gross margins for business from our customers," Peek said.

Despite the shipping losses, the company has decided to extend its free-shipping offer through the holiday season, Peek said.

Troy Wolverton writes for News.com