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Amazon.com reports lower Q4 profit, disappointing outlook; stock falls sharply after hours(Canadian Press DataFile Via Acquire Media NewsEdge) NEW YORK _ Investors clobbered Amazon's stock Tuesday after the online retailer announced a sharply lower fourth-quarter profit, revenue that missed analysts estimates and a disappointing forecast for the current period. Seattle-based Amazon.com Inc. said Tuesday that its net income was $177 million, or 38 cents per share, in the three months that ended Dec. 31. That's down from $416 million, or 91 cents per share, a year earlier. Revenue grew 35 per cent to $17.4 billion, below the $18.3 billion that analysts polled by FactSet had expected. Amazon's operating expenses, meanwhile, grew 38 per cent to $17.2 billion. The company has been investing heavily in new sales-fulfilment centres so it can grow its business. That has cut into profits all of last year. For the current quarter, Amazon is forecasting $12 billion to $13.4 billion in revenue. Analysts were expecting $13.42 billion. The company also said it may record an operating loss for the quarter. Its outlook was in the range of a loss of $200 million to a profit of $100 million for the three months ending in March. Amazon said sales of its Kindle tablet computers and e-reader gadgets nearly tripled compared with the final quarter of 2010. As its custom, though, the company did not give exact sales numbers for the devices. The company's stock (Nasdaq:AMZN) dropped $16.49, or 8.5 per cent, to $178.45 in after-hours trading following the earnings announcement. Although the company's earnings of 38 cents a share were well above Wall Street expectations of 17 cents, investors seemed to focus on the bad news elsewhere. Citi Investment Research analyst Mark S. Mahaney said the results were surprising. He said analysts had been worried about Amazon's profit margins because of the heavy spending, but they had expected stronger revenue growth. Online shopping was popular over the holidays, and the midpoint of Amazon's revenue guidance had been higher than what it reported Tuesday. The Kindle Fire, Amazon's answer to Apple Inc.'s popular iPad, went on sale in November. The company sees the Kindle as a way to drive sales of digital content such as e-books, music, movies and apps. CEO Jeff Bezos said the Kindle was Amazon's bestselling product during the holiday season in both the United States and Europe. In Canada, Amazon is also up against the Kobo ebook readers that were launched by Toronto-based Indigo Books & Music (TSX:ING), which operates several chains of bricks-and-mortar retail stores across Canada. Indigo, which has since spun off the electronic book business as a separate company and sold its remaining stake to a Japanese company, has positioned Kobo as a way for it and other traditional book sellers to compete with the Kindle. Sales at Amazon's media business, which includes books, DVDs, and content consumed on the Kindle, grew 15 per cent to $6 billion. Sales from electronics and other general merchandise, which includes the Kindle devices, jumped 48 per cent to $10.9 billion. The company grew its employee base 67 per cent from a year earlier, ending the year with 56,200 full-time and part-time workers. Chief Financial Officer Tom Szkutak said the job additions were in operations and customer service to support Amazon's growth. For all of 2011, Amazon earned $631 million, down from $1.15 billion a year earlier. Revenue grew to $48.1 billion from $34.2 billion. (c) 2012 The Canadian Press |