Amazon profit up 68 pct; outlook scares investors
By RACHEL METZ, AP Technology Writer Rachel Metz, Ap Technology Writer
SAN FRANCISCO – Amazon.com Inc. said Thursday that its first-quarter profit surged 68 percent, showing that consumers are even more comfortable opening their wallets to the online retailer as the economy slowly improves. But investors were spooked by Amazon’s forecast for the current quarter and its shares fell 6 percent in extended trading.
Amazon earned $299 million, or 66 cents per share, in the January-March period. That compares with a profit of $177 million, or 41 cents per share, in the year-ago quarter.
Amazon’s earnings per share in the most recent quarter were 5 cents more than expected by analysts polled by Thomson Reuters.
Revenue rose 46 percent to $7.13 billion, well above the $6.87 billion analysts expected.
For the current quarter, Amazon expects revenue of $6.1 billion to $6.7 billion. That would be an increase of 31 percent to 44 percent over last year, but it also means Amazon’s revenue could fall below analysts’ current expectations for $6.43 billion in revenue.
“It’s an appropriate range,” Chief Financial Officer Tom Szkutak said during a conference call with reporters.
Amazon shares fell $9.09 to $141 in after-hours trading, after finishing regular trading up $3.66 at $150.09. Earlier in the day the stock hit an all-time high of $151.09, adjusted for splits.
Colin Gillis, a BGC Partners analyst, said the quarter was good, but not great, while Amazon’s stock was priced for a “stellar” report.
Revenue from books, CDs, DVDs and other media grew 26 percent to $3.43 billion. Electronics and other “general merchandise” revenue increased 72 percent to $3.51 billion. This second segment includes revenue from online shoe and apparel retailer Zappos, which Amazon bought late last year.
In North America, revenue rose nearly 47 percent to $3.78 billion. Revenue rose 45 percent to $3.35 billion elsewhere.
Szkutak said that while Amazon’s growth sped up during the quarter, it’s difficult to say how much of this is due to the economy improving.
“We still, even during the downturn, had solid growth, so it’s hard for us to break that out,” he said.
The first quarter ended right before the arrival of a major competitor to Amazon’s Kindle e-reader: Apple Inc.’s iPad tablet device. Like the Kindle, the iPad can wirelessly download books.
As in the past, Amazon declined to give details about Kindle sales. It reiterated that the device is Amazon’s best-selling product, but the meaning of that is unclear, given that the Kindle can only be bought on Amazon’s site. Amazon will start selling the Kindle at some Target stores later this month.