Amazon shares start slipping on weak Q4 earnings report

Amazon shares start slipping on weak Q4 earnings report

Summary: Amazon's Q4 and 2013 sales numbers were up annually, but they still didn't meet the high expectations set by analysts in accordance with the holiday season.

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The 2013 holiday season didn't pan out to be very fruitful as hoped for many retailers, and it was questionable how Amazon fared going into Thursday's fourth quarter earnings report.

The online retail giant reported a net income of $239 million, or 52 cents per share (statement).

Non-GAAP earnings were 51 cents per share on a revenue of $25.59 billion.

That's a 20 percent increase from the same quarter last year, but Wall Street was expecting Amazon to report non-GAAP fourth quarter earnings of 67 cents a share on revenue of $26.05 billion.

As a result, Amazon shares started to slip in after-hours trading.

Sales were also up for 2013 overall. The Seattle-headquartered corporation churned an annual revenue of $74.45 billion, up 22 percent from 2012.

Pushing those figures to the side in favor of buzzed-about products launched over the last three months, CEO Jeff Bezos reflected on the quarter in prepared remarks:

It’s a good time to be an Amazon customer. You can now read your Kindle gate-to-gate, get instant on-device tech support via our revolutionary Mayday button, and have packages delivered to your door even on Sundays. In just the last weeks, Forrester, YouGov, and ForeSee have all ranked Amazon #1 – and we believe we’re just scratching the surface of what world-class customer service can be.

For the current quarter, Wall Street wants Amazon to return with earnings of 54 cents per share on a revenue of $19.67 billion.

Amazon offered a revenue guidance range of $18.2 billion and $19.9 billion.

Here's a closer look at how Amazon wrapped up the year, by the numbers:

Topics: Cloud, Amazon, E-Commerce, Mobility, Tablets

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14 comments
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  • uhm And NSA Purchasing Consumer Data...

    And intercepting purchased laptops to instal NSA malware onto them (as stated by numerous tech and media sources including ZD Net) should be of more concern to Amazon shoppers than a price hike. Priorities people, priorities.

    Just saying.
    Rilriia
  • Doomed.

    Share price slipping!
    They can no longer innovate!
    Need a new CEO!
    They're doomed!

    Sorry, I thought this was an article about Apple.
    costa k
    • NEW CEO and NEW VISION!

      Unfortunately, Amazon.com seems to have fallen into the "Success leads to Excess" trap, like many successful ventures that lose their way. Amazon's success has gone to its collective head. While amazon.com and its CEO seem to revel in its and his success, Customer Service and product quality have suffered dramatically. Amazon.com reps continually respond to queries with a response concerning issues with Customer Accounts that "..;.no further insight is available...". Insight is a very necessary attribute for any person or enterprise hoping to retain market share! Too Bad, amazon.com. WAKE UP!
      ktree325
  • 0.9% profit. I will never understand

    why people invest in this company. With a profit margin that razor thin, if someone sneezes, you are going to go bankrupt.
    baggins_z
    • We may have reached a tipping point on that.

      Oh, the irony of Amazon stock finally getting spanked but in a quarter when they showed a profit. The Market is crazy. It will be interesting to see what the reaction will be if Amazon misses in Q2.
      matthew_maurice
    • What about their reinvestment

      I hadn't looked what the figure was, but Amazon is always reinvesting in their infrastructure. If they took a quarter without building more warehouses and such I believe the profit would probably be on par with other corporations their size. Amazon is still aggressive about expanding and that takes away a lot of profits.
      bluescratch
      • That may be true....

        But the accounting should show that at least with capital investments where they are depreciated over time.

        The issue is that Amazon has been "growing for the future" for their entire existence. At some point you need to focus on today. Long term strategic planning and growth are great, but the future needs to come at some point.
        yoshipod
        • Just looking at Walmart for comparison

          They have added over 6,000 stores since 2000. Somehow all that capital investment does not prevent them from being profitable.
          yoshipod
          • yoshipod: Are you aware that, Amazon and Wal-mart are not the same type of

            companies? Yeah, they both do retail, but, their business models are completely different.

            The management at Amazon are constantly trying to "innovate" their business model, but they're not paying attention to the most important part of their mission: to be profitable.
            adornoe
          • PROFIT = CUSTOMER SATISFACTION.

            Amazon's remarkable success did not just happen by magic or something. Amazon's customers paid the bills. Amazon's Customer Service, once a shining example, has fallen miserably. Customer Satisfaction Falls, Profits Fall!
            That's some kind of Business School Rule, or something. (Well, maybe not a B.S. Rule, but it makes sense).
            ktree325
        • Maybe some REAL CUSTOMER SERVICE would help?

          The focus of amazon.com's CEO on wonderful future plans seems to be draining the company's current resources into new "TOYS". (Like drones to deliver new Kindles).
          ktree325
      • BUILD MORE DRONES!!!!!

        Amazon's plans to build drones to deliver new Kindles has probably drained its current revenues. Do not worry. The drones will eventually work and then EVERYONE can get a new Kindle Fire ASAP!
        ktree325
    • Invest In amazon.com? REALLY?

      Investors generally choose where to place their money according to the prospective company's future outlook, and past performance. In these respects, amazon.com's past is admirable, but its present attitude toward its "Valued Customers" is simply deplorable. Amazon seems to think that it created its own success, forgetting that its customers paid the bills. There is NOTHING magic about amazon.com; it is just an on-line merchant. When a company's reps respond to inquiries concerning accounts issues by saying "...no further insight will be forthcoming.." ( as thousands of amazon.com customers were recently informed), something is very wrong. Invest your money somewhere else!

      (DO NOT RESPOND TO MY COMMENTS: I HAVE NO FURTHER INSIGHT!) If I did, maybe I could get a job at amazon.com Customer Service!
      ktree325
  • "That's a 20 percent increase from the same quarter last year"

    But that's still not good enough? Yikes. I wish my company had made that much of an increase year over year!

    It will definitely be nice when Amazon has to start make a profit so it will stop keeping it's prices at a level where other *profit making* companies can't compete with it.
    johnd126