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

Amazon's fourth quarter results didn't live up to expectations. The revenue outlook for the first quarter also missed.
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Written by Larry Dignan, Contributing Editor on

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.

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