Who Needs Great Earnings? Amazon Stock Soars

By Jacqueline Lee January 30, 2013

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.




Edited by Brooke Neuman

Contributing Writer

SHARE THIS ARTICLE
Related Articles

SpaceX and Blue Origin Talk Seriously Going to Mars

By: Doug Mohney    9/29/2016

SpaceX CEO and nerd-god Elon Musk put forth his architecture for mankind to colonize Mars and potentially other bodies in our solar system on Tuesday,…

Read More

The Galaxy Note 7 Disaster: Samsung's Strategic Weakness

By: Rob Enderle    9/29/2016

Samsung was really the only company in recent years to truly threaten Apple successfully; granted, they did so largely with Google's help. But Apple h…

Read More

Was the Yahoo Hack State-Sponsored? Unlikely Says Cyber Expert

By: Gerald Baldino    9/28/2016

Last week, Yahoo confirmed at least 500 million user accounts were compromised by a data breach in 2014. The attack was the largest security breach ev…

Read More

Will Disney Make Twitter the Happiest Social Media on Earth?

By: Alicia Young    9/26/2016

To get back on their feet, Twitter is reportedly seeking an acquisition deal that would value them at $30 billion. There are a few contenders already,…

Read More

500M Yahoo! Users Impacted by Hack; What It Says About Password Protection

By: Paula Bernier    9/23/2016

Yahoo! is facing a lot of challenges lately. Add to the heap the breach - which the company confirmed today - that has affected 500 million Yahoo! acc…

Read More