Amazon posts holiday quarterly earnings, stock climbs
updated 05:15 pm EST, Tue January 29, 2013
Quarterly results limit yearly loss to $39 million
Amazon today announced financial results for its fourth quarter that concluded on December 31, 2012. Net sales of the e-commerce leader increased 22 percent to $21.27 billion in the fourth quarter, compared with $17.43 billion in fourth quarter 2011. Despite the increases, net income decreased 45 percent to $97 million in the fourth quarter, or $0.21 per share, compared with $177 million, or $0.38 per share, in fourth quarter 2011. Overall, Amazon was able to cut its net losses on the year to $39 million.
Highlights from the results include Amazon's Kindle line continuing its run as the best-selling, most gifted, and most wished for product on Amazon, a hardly surprising finding. Amazon's digital media selection has grown to over 23 million movies, TV shows, songs, magazines, books, audiobooks, and popular apps and games in 2012, an increase from 19 million at year-end 2011.
Boosting its video selection, the retailer signed new licensing agreements with Turner Broadcasting, Warner Bros. Domestic Television Distribution, and A+E Networks, for popular television series including Falling Skies, The Closer, Pawn Stars, Storage Wars, and Dance Moms, expanding its catalog of title offerings for Prime Instant Video to more than 36,000 movies and television episodes. Also noted -- despite some recurring issues in Northern Virginia -- was the fact that Amazon Web Services (AWS) launched 159 new services and features in 2012. This is nearly double the services and features it launched in 2011, and boasted 10 price reductions to users in 2012.
Amazon had predicted net sales between $20.25 billion and $22.75 billion in the last quarter of 2012. It expected operating income to fall between a range of a loss of $490 million and a gain of $310 million. Amazon stock is up 9.5 percent to $285.15 per share after taking a beating before the earnings report, and shedding 5.7 percent of its volume during the normal trading day. Some analysts have expressed bewilderment that Amazon's stock continues to do well when the company is losing money overall, with profits dropping 45 percent in the holiday quarter.
