Amazon's Q4 falls short of estimates, outlook misses too

Amazon's Q4 falls short of estimates, outlook misses too

Summary: Amazon's fourth quarter results didn't live up to expectations. The revenue outlook for the first quarter also missed.

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TOPICS: E-Commerce, Amazon, Cloud
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Amazon's big fourth quarter wasn't big enough relative to expectations. The e-commerce giant also delivered a first quarter outlook that disappointed.

The company reported fourth quarter earnings of $97 million, or 21 cents a share, on revenue of $21.27 billion, up 22 percent from a year ago. Wall Street analysts were expecting earnings of 28 cents a share on revenue of $22.26 billion.

As for the outlook, Amazon said it would report first quarter sales of $15 billion and $16.6 billion with between an operating loss of $285 million and an operating profit of $65 million.

Wall Street was expecting earnings of 34 cents a share on revenue of $16.8 billion in the first quarter.

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In a statement, CEO Jeff Bezos said Amazon was seeing consumption of books shift to digital. Amazon also touted its Amazon Web Services (AWS) unit, its new services and global expansion.

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For 2012, Amazon reported a net loss of $39 billion, or 9 cents a share, on revenue of $61.09 billion, up 27 percent from a year ago.

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By the numbers:

  • "Other" revenue, which largely consists of AWS, had annual sales of $2.52 billion, up from $1.58 billion in 2011. "Other" sales were $820 billion in the fourth quarter, said Amazon.
  • North America revenue growth in the fourth quarter was 23 percent. International revenue growth was 21 percent. Amazon gets 57 percent of its sales from North America. 
  • Sales of e-books were up 70 percent and physical books gained only 5 percent in the fourth quarter.
  • AWS launched 159 new services and features in 2012.
  • Technology and content costs were $4.56 billion in 2012, up from $2.9 billion in 2011. Fulfillment expenses were $6.42 billion in 2012, up from $4.57 billion in 2011.
  • Amazon ended the quarter with 88,400 employees.

Topics: E-Commerce, Amazon, Cloud

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9 comments
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  • Interesting

    They have to keep prices (and profits) low to lure customers. That's about the only thing that separates Amazon from others and even B&M stores.

    I know I'd rather walk into a B&M, pay the same or a couple $$ more and have it that day rather than wait for Amazon.
    itguy10
    • nah, my time is valuable

      I just use my kindle to buy the book now or use it to get a loan from my local library.
      otaddy
  • Sure about that loss of $39BILLION?

    Please correct...should be $39 MILLION.
    Aegaeon
  • 0.4% profit margin?!?

    Holy smokes.
    baggins_z
    • Retail sector will continue to suffer

      The consumer-based economy is going out, and will take lots of companies with it. This is a long painful but inevitable reconstruction procedure.
      LBiege
  • Where's the outrage?

    No more innovation!
    No more growth!
    Best years behind them!
    Falling profit!
    Falling stock prices!
    Didn't meet expectations!
    No specific tablet sales numbers therefore they mustn't be selling any.
    ANY!
    The other day I saw 1 person in a computer shop look at a competitor's tablet. Proof that this is the end!
    A stagnating boring OS!
    Linux forever!
    Android rules!
    Windows-Surface-8-RT-Pro-Phone rocks!

    Sorry, I thought this was an article about Apple...
    costa k
  • Error in text!!

    Hi
    You said that "For 2012, Amazon reported a net loss of $39 billion". However; as another reader has already pointed out and after further research;the amount is $39 MILLION and not billion. It makes a huge differences.

    I take this opportunity to congratulate you on all of ZDNET's articles as they are very interesting :D

    Robert :)
    bertufarrugia
  • Taxes

    A lot of UK customers are boycotting Amazon (and Starbucks for that matter) owing to them not paying their fair share of taxes to the UK Government. Maybe this has had an effect?
    pianoman1962
    • Guess what happens when a company pays taxes?

      When taxes are paid to any government, the company "paying" them, is not the one paying them.

      Those taxes are passed on to the consumer in the form of higher prices for their products and services. So, in effect, it's the consumer who ends up paying those taxes to the UK or to any government. Hope you people over there in the UK like paying higher taxes, because, that's really what you're paying for by way of the higher prices to Amazon or to Starbucks.
      adornoe