Why Is Amazon Still Unable To Post Big Profits?

Sellers on Amazon.com, Inc. AMZN sold more than two billion items last year.

That number is staggering, but it begs one question: where are the profits that should coincide with such an achievement?

"They carefully manage to never make any money," Dan Miller, senior analyst and founder of Opus Research, told Benzinga. "[CEO Jeff] Bezos is conditioning [investors] to be patient. He's still making pledges on five different fronts. That's a lot of wars to fight."

Rob Enderle, principal analyst at Enderle Group, thinks that might be one war too many.

"The only way he is going to be able to survive the number of battles he's got is if he keeps moving the company as fast as possible," Enderle told Benzinga. "If he pivots and starts focusing on the financial analysts and raising profits and shifting resources from competition, these big [competitors] will probably eat him up and he knows that. I think he's going to find it very difficult to pivot to profit."

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No Profits By Design

Some investors might complain about Amazon's earnings, but Enderle thinks it might be a strategic decision.

"That's by design," he said. "One of the things you learn when running a company is once you make a profit, people expect you to increase that profit over time. If you're at breakeven and you stay at breakeven, folks kind of leave you alone for a while."

Amazon doesn't always break even, however.

"[Jeff Bezos] been investing back into the firm every single cent that it makes," Enderle added. "He recognizes there are threats coming. Remember, they're competing with IBM on one hand and Alibaba and eBay. They've got an impressive number of competitors. He's got that company running as fast as it can possibly go."

If Amazon were to transform into a company that focused on building profit and offering dividends, "then suddenly his ability to move that company very rapidly is going to go away and the number of competitors is probably going to eclipse him," Enderle said.

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.