updated: Amazon may be taking a lesson from Apple when it comes to earnings. Forecast low, come in high and keep everyone on Wall Street smiling. The company surpassed analysts' expectations for the first quarter, giving much of the credit to the re-launch of its e-book reader, the Kindle.
For the quarter, Amazon said it had net income of $177 million, or 41 cents per share, on sales of $4.89 billion, exceeding Wall Street's estimates of 31 cents per share on revenue of $4.76 billion. In January, the company had forecast first quarter revenue to be between $4.53 and $4.93 billion, though analysts had been expecting the high end of the range. (Statement)
Profits for the quarter were up 24 percent over the same quarter a year ago. Revenue was up 18 percent over the year-ago quarter.
This year, the big news for the quarter was the launch of the Kindle 2. In a statement, Amazon CEO and founder Jeff Bezos said, "We’re grateful and excited that Kindle sales have exceeded our most optimistic expectations.”
Growth in all categories, however, slowed considerably over the year-ago quarter when each of the three categories - Media, Electronics and Other - all saw large jumps. Now, all were down considerably. Only the Electronics segment in North America saw a modest slip.
Retail sales continue to far outpace sales in Amazon's "Other" category, notably Amazon Enterprise Solutions program and Amazon Web Services. The "Media" category includes sales of books, movies and music. "Electronics" includes computers and other devices, such as the Kindle. Retail may stink in this economic climate - but Amazon is still doing better than Ebay, at least as far as sellers are concerned.
During a call with analysts, the matter of enterprise adoption of cloud computing services came up. CFO Tom Szutak said there has been some "good traction" in the enterprise, as well as startups and small- to medium-sized businesses. noting large clients such as Autodesk, ESPN and a number of hedge funds.
For the current quarter, Amazon said it expects net sales to be between $4.30 billion and $4.75 billion, a jump of 6 percent to 17 percent, compared to the second quarter of last year.
The company ended the quarter with 20,600 employees, a 16 percent increase over the same quarter last year but down 100 from the fourth quarter. In the call, the company noted that the company did some hiring but also had some attrition. The reduction was not a result of cost-cutting efforts.
Shares of Amazon gained less than two percent on the day, closing at $80.61. Shares were on the upswing in after-hours trading.