Amazon earnings: Shares tumble as holiday sales fall short

Amazon earnings: Shares tumble as holiday sales fall short

Summary: Amazon, a bellweather of the online retail market, reported a holiday quarter profit that exceeded Wall Street's estimates but fell short in revenue, a surprise that sent shares tumbling in after-hours trading.For the fourth quarter, the company reported net income of $416 million, or 91 cents per share, an increase from the 85 cents reported for the same quarter a year earlier.

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Amazon, a bellweather of the online retail market, reported a holiday quarter profit that exceeded Wall Street's estimates but fell short in revenue, a surprise that sent shares tumbling in after-hours trading.

For the fourth quarter, the company reported net income of $416 million, or 91 cents per share, an increase from the 85 cents reported for the same quarter a year earlier. Wall Street had been expecting 88 cents. Sales were up 36 percent from last year, coming in at $12.95 billion, but missed analysts' estimate of $13 billion. (Statement, Techmeme)

For the year, the company reported net income of $1.15 billion, or $2.53 per share, or sales of $34.2 billion, a 40 percent jump over 2009. In a statement, founder and CEO Jeff Bezos said:

Thanks to our customers, we achieved two big milestones. We had our first $10 billion quarter, and after selling millions of third-generation Kindles with the new Pearl e-ink display during the quarter, Kindle books have now overtaken paperback books as the most popular format on Amazon.com.

Among the quarter's highlights:

  • Fourth quarter sales in the U.S. and Canada were up 45 percent from a year earlier. International sales grew 26 percent.
  • Worldwide Media sales were up 12 percent. Worldwide Electronics and Other General Merchandise sales were up 60 percent.
  • The company said it sold "millions" of third-generation Kindle devices with tyhe new Pearl e-ink display and that sales of the device eclipsed sales of "Harry Potter and the Deathly Hallows" as the best-selling product in the company's history. Once again, Amazon did not release actual sales figures for the product.
  • Amazon launched a Kindle App for Windows Phone 7, adding to its lineup of apps that allow the reading of Kindle publications on multiple devices.
  • The Price Check for iPhone app, which allows shoppers to instantly comparison shop a product by scanning a barcode, snapping a picture or even speaking the product name into the device. It was used millions of times over the holiday season, the company said.
  • Amazon Web Services achieved Level 1 Payment Card Industry (PCI) compliance, which allows merchants and other service providers to run their applications on AWS PCI-compliant technology infrastructure to store, process and transmit credit card information in the cloud.

On a call with analysts today, company execs went out of their way to avoid tipping their hats on any details around Kindle sales. Clearly, it's a big seller and a big deal for the company - especially now that Kindle books have overtaken paperback books as the more popular format.

During the Q&A, the subject of Kindle came up and the responses were free of any real substance.

  • "We're extremely pleased with what we're seeing. We sold millions of devices in Q4." Right, we knew that already. It was in the release.
  • "Kindle book sales are growing at a faster rate than paperbooks." Already knew that, too.
  • "With the opportunity we see there, we'll continue to invest in that business." Well, I probably could have guessed that.

Looking ahead, the company projected first quarter revenue to be between $9.1 billion and $9.9 billion, up 28 percent to 39 percent over last year's first quarter. Wall Street had forecast sales of $9.4 billion for the quarter.

Shares of Amazon were up more than 5 percent in regular trading, closing at $184.45. But the gains were lost and shares continued to decline in after-hours trading, down nearly 10 percent.

Topics: Enterprise Software, Amazon

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  • RE: Amazon earnings: Shares tumble as holiday sales fall short

    When the government calls and says " we don't like that guy" and your management immediately salutes, that might cost you some money.
    mswift@...
  • RE: Amazon earnings: Shares tumble as holiday sales fall short

    I stopped using Amazon when they started collecting sales tax again.
    slyone13
  • RE: Amazon earnings: Shares tumble as holiday sales fall short

    Amazon lets too many 3rd-party vendors who sell through them get away with scam-like behavior. Examples:<br><br>1. Bait-and-switch pricing: you search for an item and one of the listings is for an extremely low-priced product. You go to its Amazon product page and *hopefully* notice in the small, faint print that the "shipping" charge is outrageous, often making the item a very high-priced alternative.<br><br>2. Bait-and-switch 2. Some vendors offer used books at reduced rates, but ship badly out of date copies. I ordered the 6th edition of a technical book, emailed the vendor not to ship an older edition, but they shipped the 2nd edition anyway. Amazon's response was that the 2nd edition is "materially the same" as the 2nd edition. Yeah, right.<br><br>3. When I was looking for stereo speakers, I saw that essentially all brands in the same price range had about the same technical specs, so I was focusing on looks and price. The pair that I ordered had a picture of two speakers on its Amazon product page, but when the order arrived, it was only one speaker. Since probably 99.999% of stereo speaker sales are for PAIRS of speakers, it never dawned on me that they might be selling ONE speaker out of a pair. So I had to order the other speakers, doubling the cost to make the pair the most expensive in its category, and that was before paying the extra **$9** shipping, making it $18 to mail something that probably cost them $4 or so total to ship.<br><br>4. Price gouging -- The Friday of CES, I ordered an Archos 70 tablet from ErwinComp.com for $338. Amazon's 3rd-party vendor was a little more expensive, but when demand for the A70 shot up after CES and supplies were scarce, Amazon was listing as much as $449 for the A70-250G when other vendors still kept their prices at a reasonable level. <br><br>If you buy products which Amazon itself carries, you normally get good service at the best price, but if they continue to allow 3rd-party vendors to anger Amazon's customers, surely Amazon will suffer in the long run.
    nfordtchrpub
  • RE: Amazon earnings: Shares tumble as holiday sales fall short

    I saw that essentially all brands in the same price range had about the same technical specs, so I was focusing on looks and price. <a href="http://sazkove-kancelaree.cz">sazkove tipy</a>
    marco5811
  • RE: Amazon earnings: Shares tumble as holiday sales fall short

    <h2 style="color:#000;font-family:Verdana,sans-serif;font-size:12px;">I have to think that there will be a pretty significant rebound this year on <a href="http://www.collectionsetc.com/Products/Holidays-amp-Seasonal/Christmas/category.aspx/_/N-2hqh4r">holiday decorations</a>, gifts, foodstuffs, etc.</h2>
    serpkind