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Amazon Profit Falls 37%

Amazon Profit Falls 37%
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4/25/2013 5:51 PM ET

Online retailer Amazon.com, Inc. (AMZN: Quote) said Thursday after the markets closed that its first quarter profit fell 37% from last year, as higher spending on expansion plans dented a 22% sales growth.

However, the company's quarterly earnings per share came in above analysts' expectations, but its quarterly sales fell shy of analysts' forecast. At the same time, the company gave a down-beat sales forecast for the current quarter.

Amazon shares are currently losing 5% in after hours trading after closing the day's regular trading session at $274.70, up $5.92 or 2.20%. The shares trade in a 52-week range of $193.02 to $284.72.

North America segment sales, representing the company's U.S. and Canadian sites, rose 26% to $9.4 billion in the first quarter.

International segment sales, representing the company's U.K., German, Japanese, French, Chinese, Italian and Spanish sites, grew 16% to $6.7 billion.

For the first quarter, worldwide media sales increased 7% to $5.1 billion, while worldwide electronics and other general merchandise sales surged 28% to $10.2 billion.

For the first quarter ended March 31, 2013, the Seattle, Washington-based company reported net income of $82 million or $0.18 per share, compared to $130 million or $0.28 per share for the year-ago quarter.

On average, 34 analysts polled by Thomson Reuters expected the company to earn $0.09 per share for the first quarter.

Gross margin for the quarter improved to 26.6% from 24.0% a year ago. Operating expenses for the quarter were up 22% from last year.

Net sales for the first quarter rose 22% to $16.07 billion from $13.18 billion in the same quarter last year. Thirty-five analysts had a consensus revenue estimate of $16.16 billion for the first quarter.

Looking forward, the company forecast second quarter net sales of $14.5 billion to $16.2 billion, representing a year-over-year growth of 13% to 26%. Analysts currently expect the company to post revenue of $15.94 billion for the second quarter.

Second quarter operating income is expected to range between a loss of $340 million and a profit of $10 million, compared to a profit of $107 million in the prior year period.

Amazon has diversified well beyond online retailing. The company last month lowered the price of its best-selling Kindle Fire HD tablets in the U.S., citing lower production costs after expanding sales of the devices to Europe and Japan. The Wi-Fi version of the device now starts at $269 and the 4G version starts at $399.

Amazon has acquired Goodreads, a site for readers and book recommendations that helps people find and share books they love.

There were media reports earlier this week that Amazon is developing a television set-top box that will stream video content over the Internet.

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by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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