Highlights from Amazon's (AMZN) Q4 Call: Active Customer Accounts Pass 164M, Inventory Up 56%, Guidance 'Conservative'

February 1, 2012 3:48 PM EST
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Amazon.com (Nasdaq: AMZN) shares are currently down 8 percent to $178.86 following fourth-quarter earnings Tuesday afternoon which came in better than the Street, but sales that missed by a wide margin. The online retailers first-quarter outlook also seemed concerning.

The company posted quarterly EPS of $0.38, $0.19 better than the analyst estimate of $0.19, on sales of 17.4 billion, versus the consensus estimate of $18.2 billion. Amazon.com is modeling for first-quarter revenue of $12-$13.4 billion, versus the consensus of $13.41 billion.

Below are some highlight's from the company's conference call.
  • Media revenue increased to $6.01 billion, up 15%.
  • EGM revenue increased to $10.91 billion, up 48%.
  • Worldwide EGM increased to 63% of worldwide sales, up from 57% during the same quarter last year.
  • Unit growth in the physical book segment was double-digit in Q4 year-over-year. CFO Tom Szkutak said, "If you think about the shift to digital content and just the really rapid growth on the Kindle side, we were pleased to see that."
  • Active customer accounts exceeded 164 million.
  • Seller units were 36% of paid units, compared to 32% of paid units in Q4 2010.
  • Sales in North America were up 37% to $9.9 billion
  • Sales in the International segment fell 46% to $177 million.
  • Inventory increased 56% to $4.99 billion, and inventory turns were 10.3, down from 11.4 turns a year ago, as we expanded selection, improved in-stock levels, and introduced new product categories.
  • Said the guidance used appropriately conservative assumptions.
  • This guidance anticipates approximately 50 basis points of unfavorable impact from foreign exchange.
  • "We remain heads-down focused on driving a better customer experience through price, selection, and convenience. We believe putting customers first is the only reliable way to create lasting value for shareholders."
  • Taking a question on sharp quarterly headcount growth of 67%, CFO Szkutak said, "First thing is we are investing in a lot of different areas across the businesses we've talked about. That being said, when you look at that increase that you're referring to, the majority of those increases are in our operations and customer service area; and so, again, it's in support of the growth. And certainly, you're seeing it also in our operating costs. And again, we're fortunate to have a lot of opportunities."

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