With Amazon.com, Inc.'s (NASDAQ:AMZN) latest quarterly results showing an operating cash flow that declined 11% to $587 million for the trailing twelve months -- compared with $661 million for the trailing twelve months ended September 30, 2005 -- Amazon still needs bright spots in sales growth among all its categories to look attractive to investors. It's true that Amazon has been adding capex into its business in a large way to pad the future outlook for the company. This is a good thing that also leaves some bad financial marks in the short-term. But, businesses aren't in business for the short term. That is, unless we all close our eyes and look back to the 2000-2001 timeframe.
Amazon's free cash flow decreased 23% to $366 million for the trailing twelve months before it's latest quarterly results, compared with $475 million for the trailing twelve months ended September 30, 2005, driven primarily by its increased expenditure in technology and content -- that needed but nasty capex thing.
How has Amazon's "Prime" shipping program helped things? This rather nice shipping program gives customers free shipping upgrades for a one-time yearly fee, no doubt cooked up by statistical analysts who know it's a money-maker for the company, but it's pitched as a money-saver for regular Amazon customers.
While no specifics were announced, Amazon Prime appears to have continued quarter-to-quarter growth for new memberships. For a flat membership fee of $79 per year, Amazon Prime members get unlimited, express two-day shipping for free, with no minimum purchase requirement on over a million eligible items sold by Amazon.com. That's not a bad deal at all, and really will come in handy with upcoming holiday shopping.
In fact, expect to see Amazon pitch its Prime service hard soon to hook customers in during the heavy-shopping holiday season -- then keep them coming back to shop throughout the year.
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