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Amazon Misses Estimates: Q4 Earnings Down 58 Percent

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Amazon (NSDQ: AMZN) disappointed investors by reporting Q4 2011 revenues of $17.4 billion this afternoon, up 35 percent from a year ago but missing analyst estimates. Net income slid to $177 million on earnings of $0.38 per share, down 58 percent from this time last year, and shares were down 8 percent in after-hours trading.

Amazon says Kindle sales (of the Fire and e-readers) “nearly tripled” during the nine-week holiday period ending December 31, up 177 percent over the previous year. As usual, the company did not state how many Kindles it has actually sold.

Operating income was $260 million for the quarter — beating the company’s forecast for operating income between -$200 million and $250 million for the quarter, though down 45 percent from last year. Amazon has invested heavily in fulfillment centers and devices and is believed to be taking a loss on the Kindle Fire. It has stressed that it thinks of the Kindle business in terms of “lifetime value,” including the device, accessories, content, ad-based revenue and the “special offers” on the ad-supported Kindles.

North American media sales grew just 8.1 percent during the quarter, to $2.56 billion, despite the release of the Kindle Fire and new e-readers during the quarter. International media sales for the quarter grew 20.3 percent, to $3.45 billion. Amazon launched Kindle stores in Italy and Spain during the quarter.

Amazon stressed the growth of its various video services, though it did not break out their revenues: The number of videos purchased or rented from Amazon Instant Video “more than doubled” over last year, as did the number of Instant Video customers. And “the number of Prime Instant Video streams increased nearly 300% in the fourth quarter compared to the third quarter.” (Prime Instant Video is available free to Amazon Prime members, who can choose from a library of over 13,000 titles.)


2 Responses to “Amazon Misses Estimates: Q4 Earnings Down 58 Percent”

  1. It was the number of Appstore for Android customers that “nearly tripled”, not the number of Kindles sold, as you erroneously state here in the second paragraph. The 177% figure you’ve got is correct.