Sales surge narrows Amazon’s losses

The Seattle-based group posted losses of 41 million US dollars (£25.3m) for the third quarter, down sharply on the 274 million dollars (£169m) seen a year earlier as sales leapt 24 per cent.

The world’s largest online retailer, which has more than 6,000 permanent staff across its UK operations, has now posted three quarters in a row of losses after ramping up investment, but cheered investors as it said it expected fourth quarter sales to rise by another 10 per cent to 25 per cent.

There were also forecast-beating earnings from technology titan Microsoft overnight after the software group reported a 17 per cent rise in third quarter net income to 5.24 billion dollars (£3.2bn).

Shares rose in after-hours New York trading for both firms following the robust figures, up six per cent for Microsoft and eight per cent for Amazon.

Amazon boss Jeff Bezos said it had been a “busy few months” for the group after launching new Kindle e-readers and tablets, as well as expanding its warehouse network to reduce shipping costs and adding robots to boost efficiency in delivering orders.

The group gave no break-down on figures for the UK, but Amazon.co.uk managing director Christopher North moved to defend the firm against criticism over taxes paid in Britain and the threat to high street rivals.

He told the Daily Telegraph that the group’s growth was “really good for the UK”, with more than £1bn invested in Britain and £1 billion handed to delivery firms in the past five years.

He added Amazon had paid more than £500m in VAT to the Treasury over the past year.

The group, which launched in the UK 15 years ago, said top sellers in Britain over the third quarter were video game releases Grand Theft Auto 5 and FIFA 14, as well as Kindle books such as books ‘Single Woman Seeks Revenge’ by author Tracy Bloom.

Microsoft’s figures came as speculation continues to swirl over who will replace outgoing chief executive Steve Ballmer.

He announced in August that he would step down within 12 months, but the group gave no update on the search for his successor with the third quarter figures.

The group said revenues rose 16 per cent in the quarter, with sales of its Surface tablets hitting 400 million US dollars (£247m) as price cuts helped more than double sales quarter on quarter in a sign that it is beginning to recover after initial sluggish demand.