Amazon reports quarterly loss, so of course share price is up

Welcome to the wacky world of Amazon.

Amazon, the company which loves to make no profit, has made no profit. In its quarterly results, released today, the company has revealed it lost $7m for the months of April to June, down from a profit of $7m for the same three months in 2012. That's compared to total revenue of $15.7bn for the quarter, up by 22 per cent year on year.

Of course, this being Amazon, the company's stock is actually 1.3 per cent higher than it was at the close of trading yesterday. Immediately after the news was released, it fell to a low of 299, having closed at 303.4 the day before; but since then it's risen inexorably, and it's now at 307.8. That's because, to quote Matt Yglesias, the Slate blogger who was cited by Amazon CEO Jeff Bezos in a letter to shareholders, "Amazon, as far as I can tell, is a charitable organization being run by elements of the investment community for the benefit of consumers". The company's owners seem a unique group of people on Wall Street: those who don't actually want to make any money.

Of course, that's not actually particularly likely. Instead, the operating loss probably explains the moves we've seen in the last month or so to tighten up margins at the company. First prices started to rise on small-press books, then the company re-instated delivery charges; it now looks like that was less a desire to start earning profit, and more a realisation that margins had dropped too low for even a company like Amazon.

But while margins are low, revenues are up, up, up. Which means the company's primary goal – of becoming the biggest in the world, profit be damned – is ticking along nicely. As for what happens when they do, well, do we really care? We've all got such cheap hardbacks and CDs, it's almost not worth it.

A man walks through an Amazon warehouse. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty
Show Hide image

What's going on in Northern Ireland?

Everything you need to know about why Northern Ireland is heading for an early election - and how it all works. 

Northern Irish voters will elect a new government, just seven months after the last election. Here’s what you need to know.

It all starts with something called the Renewable Heat Incentive (RHI), a scheme designed to encourage businesses to switch to renewable sources of heating, by paying them to do so. But the plan had two flaws. Firstly, there was no upper limit to how much you could receive under the scheme and secondly there was no requirement that the new heaters replace the old.

That led to businesses installing biomass boilers to heat rooms that had previously not been heated, including storage rooms and in some cases, empty sheds.

 The cost of the scheme has now run way over budget, and although the door has been closed to new entrants, existing participants in the scheme will continue collecting money for the next 20 years, with the expected bill for the Northern Irish assembly expected to reach £1bn.  

The row is politically contentious because Arlene Foster, leader of the Democratic Unionist Party, and the First Minister of Northern Ireland, was head of the Department for Enterprise, Trade and Investment (DETI) when the scheme was rolled out, putting her at the heart of the row. Though there is no suggestion that she personally enriched herself or her allies, there are questions about how DETI signed off the scheme without any safeguards and why it took so long for the testimony of whistleblowers to be acted on.

The opposition parties have called for a full inquiry and for Foster to step down while that inquiry takes place, something which she has refused to do. What happened instead is that the Deputy First Minister, Martin McGuinness, resigned his post, he said as a result of frustration with the DUP’s instrangience about the scheme.

Under the rules of the devolved assembly (of which, more below), the executive – the ministers tasked with running the government day-to-day must be compromised of politicians drawn from the parties that finish first and second in the vote, otherwise the administration is dissolved.  McGuinesss’ Sinn Fein finished second and their refusal to continue participating in the executive while Foster remains in place automatically triggers fresh elections.

Northern Ireland uses the single transferable vote (STV) to elect members of the legislative assembly (MLAs). Under STV, multiple MLAs are elected from a single constituency, to more accurately reflect the votes of the people who live there and, crucially, to prevent a repeat of the pattern of devolved rule under first-past-the-post, when prolonged one-party rule by the Unionist and Protestant majority contributed to a sense of political alienation among the Catholic minority.

Elections are contested across 18 seats, with five MPs elected to every seat. To further ensure that no part of the community is unrepresented in the running of the devolved assembly, the executive, too, is put together with a form of proportional representation. Not only does the executive require a majority in the legislature to pass its business, under a system of “mandatory coalition”, posts on the executive are allocated under the D’Hondt system of proportional representation, with posts on the executive allocated according to how well parties do, with the first party getting first pick, and so on until it comes back to the first party until all the posts are filled.

Although the parties which finish third and lower can opt out of taking their seats on the executive and instead oppose the government, if the first and second party don’t participate in the coalition, there is no government.

As it is highly unlikely that the DUP and Sinn Fein will not occupy the first and second places when the election is over, it is equally unlikely that a second election will do anything other than prolong the chaos and disunity at Stormont. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.