Amazon.com uncharacteristically missed Wall Street’s revenue target in the fourth quarter, sending its stock tumbling nearly 9 percent and showing that not all Internet companies benefited equally from the holiday shopping season.
The results from the world’s biggest online retailer highlight the unevenness of retail’s recovery, as people have picked up their spending after the official end of the Great Recession, but are being picky about what they buy.
Amazon CEO Jeff Bezos noted that the company hit two important milestones in the quarter: cracking US$10 billion in quarterly revenue for the first time, and selling more electronic books for Amazon’s hot-selling Kindle device than paperbacks.
Still, the revenue miss jolted investors, signaling that expectations were running too hot for a company whose stock price had jumped nearly 75 percent since its 52-week low of US$105.80 in July.
Analysts also focused on higher costs that hurt Amazon’s profit margin. The company has spent heavily on building its shipping and “cloud computing” businesses. That factored into Amazon’s forecast for lower operating income in the first quarter.
After the results were reported Thursday, Amazon shares fell US$15.80, or 8.6 percent, to US$168.65 in extended trading.
Net income was US$416 million, or US$0.91 per share. Analysts expected US$0.88 per share according to FactSet. In the same period the previous year, Amazon earned US$384 million, or US$0.85 per share.
Revenue jumped 36 percent to US$12.95 billion, but analysts were expecting US$13.02 billion.
The company’s first-quarter guidance of US$9.1 billion to US$9.9 billion in revenue was in line with analyst projections of US$9.32 billion.
Amazon continues to be tightlipped about its hottest seller — the Kindle.
The device has now become the best-selling item in Amazon’s 16-year history, but the company has not given specifics, other than that sales have been in the “millions.” The e-reader device starts at US$139.
Amazon has taken pains to paint the market for e-readers as additive to the overall computer market, even as evidence mounts that mobile gadgets — particularly Apple Inc’s iPad tablet — are forcing people to think twice about how they spend their technology dollars. Apple has sold nearly 15 million iPads since they went on sale in April.
The economic malaise continues to depress retail spending.
Holiday spending in the US reached the highest level on record last year at US$462 billion, according to the National Retail Federation, but would have been below pre-recession levels if inflation were factored in.
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