So what if Amazon missed Wall Street’s expectations? The stock hit an all-time high of $285 in after-market trading, which gives the company a cap of about $125 billion.
Earnings per share hit 21 cents instead of the 28 cents forecast by Wall Street. Revenue was $21.27 billion, well below an estimate of $22.3 billion. At the same time, Amazon’s profit margins exceeded expectations, and the stock, according to Business Insider, may be benefitting from short-covering.
CEO Jeff Bezos credits Kindle and e-Books for its performance. "We’re now seeing the transition we’ve been expecting,” Bezos stated. “After five years, eBooks is a multi-billion dollar category for us and growing fast – up approximately 70 percent last year.”
“In contrast, our physical book sales experienced the lowest December growth rate in our 17 years as a book seller, up just five percent. We're excited and very grateful to our customers for their response to Kindle and our ever expanding ecosystem and selection.”
Image via Shutterstock
Amazon made big investments in its technology and infrastructure, including investing in Amazon Web Services. While worldwide revenue grew 20 percent, media revenue grew 10 percent.
On a conference call discussing the earnings release, Amazon did admit to softer sales in high-ticket items. Specifically, items like televisions, mp3 players and digital cameras sported softer sales. The company also acknowledged that its Paper White e-Reader couldn’t keep up with demand, which may also have contributed to a lower-than-expected sales volume.
Amazon also credited its Prime customers as agents of company growth. Prime customers are watching free video content through Amazon, increasing membership and increasing their purchases of paid content.
“Watch free but also paying for new content, which is great,” said the company spokesman. “We've launched a number of new services on the music side. I can't give you specific for attach rates but business is making good progress and it's still very early.”
Amazon also mentioned investments in China and some European countries as possible growth drivers. But if you’re Amazon, who cares about Wall Street expectations? You can simply sit back and watch the stock value climb.
The USC Shoah Foundation was founded by Steven Spielberg in 1994 to document first-hand accounts of the Holocaust for future generations. Since then, …
Roman Valeryevich Seleznev was sentenced to 27 years in prison last week in the U.S. for stealing millions of credit card details from businesses.
Microsoft gunning for a place in the human capital management sphere with new application, and the addition of Dynamics 365 to LinkedIn.
Intellectual property is considered an intangible asset and can include things like recipe ingredients, articles, logos, and proprietary systems and p…
I've been looking at a lot of the comments on game review articles and forums of late, and gamers appear to be disappointed that the games aren't gett…