Amazon Q4 2011 earnings beat Wall St. consensus; profits down 58%

Tue, Jan 31, 2012

Finance, News

Earlier today, Amazon released their earnings results from 2011 holiday quarter and, suffice it to say, they’re no Apple.

Though overall revenue came in at $17.43 billion, up 35% from the same quarter a year-ago, the company’s actual profits declined by a whopping 58% to $177 million. All told, Amazon reported earnings of $0.38 a share, almost double the Wall St. consensus of $0.17. Last year, however, Amazon recorded net income of $416 million and EPS of $0.91.

Interestingly, the company didn’t disclose any specific Kindle Fire sales figures, though a recent report from a research company claims that Amazon thus far has sold upwards of 6 million Kindle Fire units. Now if that’s anywhere close to being true, you’d think that Amazon would be touting those figures. Perhaps its possible that Amazon just doesn’t want to set a yardstick for Kindle Fire sales prematurely.

As for Amazon’s steep drop in profits, note that Amazon reportedly loses a small bit of money on each Kindle Fire it sells. In turn, Amazon is hoping to pick up the monetary slack via sales of its Amazon Prime service.

Still, Amazon did mention that Kindle sales, in the aggregate, tripled during the holiday shopping season.

“We are grateful to the millions of customers who purchased the Kindle Fire and Kindle e-reader devices this holiday season, making Kindle our bestselling product across both the U.S. and Europe,” Amazon CEO Jeff Bezos explained in a press release. “Our millions of third-party sellers had a tremendous holiday season with 65% unit growth and now represent 36% of total units sold.”

For the entire fiscal 2011 year, Amazon reported net sales of $48.08 billion, an increase of 41% from the same quarter a year-ago.

Amazon also noted the following highlights from the quarter:

During the nine-week holiday period ending December 31, 2011, Kindle unit sales, including both the Kindle Fire and e-reader devices, increased 177% over the same period last year.

Kindle Fire is the #1 bestselling, most gifted, and most wished for product across the millions of items available on since its introduction 17 weeks ago.

Amazon launched Kindle Stores at and Kindle moved to the top of the bestseller list on launch day in both countries and held the top spot this holiday season. The new Kindle was also the bestselling product on, and

Amazon, more than any other company, is uniquely positioned to give Apple’s iPad a real fight. Not only can Amazon leverage the popularity of the homepage to drive sales, it has a vast sea of media content at its disposal. From books and movies to music and apps, Amazon can distribute media to consumers directly whereas other tablet manufacturers are at the mercy of Android.

As we’ve explained before, the Kindle Fire, more so than any other tablet, is best positioned to compete with the iPad – though that may say more about the rest of the Android playing field than about the Kindle Fire itself.

In any event, the Kindle Fire has undoubtedly sold well, but with scathing reviews from critics, some have openly questioned what the return rate on the Kindle Fire is and if it has enough legs to maintain its sales momentum now that the initial burst of enthusiasm that accompanies a brand new product launch has passed.



Comments are closed.

eXTReMe Tracker