Amazon’s earnings soar 71%

By Rachel Metz Associated Press

SEATTLE — Amazon.com Inc.’s fourth-quarter earnings skyrocketed 71 percent, as shoppers spent more than ever during a holiday season that improved over the previous year for retailers on and off the Web.

Despite the sluggish economy, Amazon did well throughout the year, drawing shoppers with deals on an immense selection of goods ranging from its Kindle electronic-book reader to kitchen gadgets.

Amazon reported Thursday that this behavior carried through the holiday season, which is typically the busiest time of the year for retailers. And Amazon doesn’t expect growth to slow: The company predicted first-quarter revenue that exceeds analyst expectations.

Amazon said it earned $384 million, or 85 cents per share, in the October-December period. That compares with $225 million, or 52 cents per share, in the year-ago quarter, which included a holiday season that Amazon had described then as its “best ever,” only to be surpassed by the 2009 holidays.

Revenue rose 42 percent to $9.52 billion. That includes a $200 million contribution from online shoe and apparel store Zappos, which Amazon bought late last year.

The results blasted past estimates of analysts polled by Thomson Reuters, who expected earnings of 72 cents per share on $9.04 billion in revenue.

Amazon forecast revenue of $6.45 billion to $7 billion in the current quarter, an increase of 32 percent to 43 percent; analysts had been looking for $6.36 billion, on average.

Revenue from books, CDs, DVDs and other media climbed 29 percent to $4.68 billion. Electronics and other “general merchandise” revenue rose nearly 60 percent to $4.61 billion. Revenue increased 37 percent in North America and nearly 49 percent elsewhere.

Speaking to analysts during a conference call, Chief Operating Officer Tom Szkutak said there are still plenty of product categories and geographic markets that Amazon could enter.

Dan Geiman, an analyst with McAdams Wright Ragen, said the quarter was “extremely strong” and Amazon’s results suggest it took some share of the online retail market from competitors.

“It’s just huge growth, given that consumers are still under quite a bit of pressure,” he said. “The economy still isn’t that great.”

As in the past, Amazon did not say how many Kindles it has sold so far, though Amazon CEO Jeff Bezos said in a statement that “millions” of people now own the e-reader.

He also said that it is selling six Kindle books for every 10 physical copies for the titles available in both formats.

Amazon had previously said it reached a Kindle milestone on Christmas Day, when it sold more copies of e-books than physical copies for the first time.

Shares in Amazon rose $3.08, or 2.5 percent, in after-hours trading. The stock finished regular trading earlier at $126.03, up $3.28, or 2.7 percent.