Heavy Spending Drives Amazon's Real Free Cash Flow Into The Red
Shares of e-commerce and cloud computing giant Amazon.com (NASDAQ: AMZN) soared following a third-quarter report that easily beat analyst expectations. Revenue jumped 34%, boosted a bit by the Whole Foods acquisition, and the company's famously meager profits were slightly less meager than analysts expected.
However, one thing is clearly moving in the wrong direction: Amazon's free cash flow. Amazon reports three separate free cash flow numbers, and all three were down substantially compared to the same point last year. The third and most meaningful of the three, free cash flow less finance lease principal repayments and assets acquired under capital leases, turned negative on a trailing-12-month basis. Chalk that up to the company's prolific spending.
Image source: Amazon.
Source: Fool.com
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