Wait. What? Just days after Apple announced the largest profits for any company ever on planet earth, Amazon’s stock rose after the company posted an unexpected profit of $214-million on $29.33-billion in revenue.
How is that losing billions? Timothy Green explains:
Free cash flow has long been the metric Amazon points to as the best way to measure the company’s performance, and Amazon certainly delivered on that front. But there’s a problem with Amazon’s free cash flow numbers: They ignore billions of dollars in spending that the company is financing through capital leases. Despite the impressive-looking free cash flow, Amazon is actually losing a tremendous amount of money, no matter how you slice it
Uh oh. Emperor Bezos is not wearing any clothes.
A funny thing happened during Amazon’s conference call a few days ago. Instead of just touting its free cash flow figures and moving on, as it usually does, the company actually mentioned these massive capital leases, pointing out that it finances some of its spending in addition to the capital expenditures reported on the cash flow statement. The biggest piece of this financing is for Amazon Web Services.
Amazon. Hiding losses in plain sight since 1994.