Amazon Q3: One-day delivery investment hits income

Amazon Q3: One-day delivery investment hits income

Amazon reported its first drop in income since 2017 for the three months ended September 30, 2019, with operating income down to US$3.2 billion (compared to US$3.7 billion in the same period a year ago) and net income dropping to US$2.1 billion in the third quarter, compared to US$2.9 billion in the equivalent quarter in 2018.

CEO and Founder Jeff Bezos attributed the decline to the company’s investment in one-day delivery services, branding the move ‘the right long-term decision’.

“We are ramping up to make our 25th holiday season the best ever for Prime customers — with millions of products available for free one-day delivery,” he said in a press release. “Customers love the transition of Prime from two days to one day — they’ve already ordered billions of items with free one-day delivery this year. It’s a big investment, and it’s the right long-term decision for customers. And although it’s counterintuitive, the fastest delivery speeds generate the least carbon emissions because these products ship from fulfillment centers very close to the customer — it simply becomes impractical to use air or long ground routes. Huge thanks to all the teams helping deliver for customers this holiday.”

Sales were up an impressive 24 percent to US$70 billion and operating cash flow grew 33 percent to US$35.3 billion over the quarter.