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

ITEXPO's IBM Keynoter: AI is Here Today

By: Paula Bernier    2/20/2018

Many folks think the artificial intelligence is something we'll see in the future. That's true. AI will be employed in a broader variety of more sophi…

Read More

The Blockchain Event Draws a Crowd

By: Paula Bernier    2/20/2018

The Blockchain Event in Fort Lauderdale draws a crowd, offers some answers, and raises lots of interesting questions. Why have some cryptocurrencies g…

Read More

Hughes: WAN Optimization Expertise, Homegrown Solution Differentiate SD-WAN

By: Paula Bernier    2/16/2018

The SD-WAN marketplace is a crowded one. But Hughes Network Systems says it brings unique expertise and proven technology to the table. And that, Jeff…

Read More

Juniper Security Expert: Behavior Analytics Helps Address Threat Complexity

By: Paula Bernier    2/16/2018

Organizations are changing their cybersecurity strategies, says Juniper Networks Cybersecurity Strategist Nick Bilogorskiy, who presented the closing …

Read More

Welbitz Wins ITEXPO's Idea SHOWCASE

By: Paula Bernier    2/16/2018

It was a sweep. Both the audience and the judges at ITEXPO's IDEA Showcase Thursday picked Welbitz as the winner. The company went up against fellow s…

Read More