Amazon (AMZN) Q4 Falls Short, But Shares Surge as Margin Improves

January 29, 2013 5:46 PM EST Send to a Friend
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Investors gave Amazon.com, Inc. (NASDAQ: AMZN) another free pass on Tuesday, with the stock ticking higher after the company reported Q4 results that fell short of expectations, with misses on both the top and bottom line. Despite the earnings and revenue shortfall margin improved and this was enough to lift the stock in after-hours trading.

In Q4 Amazon.com reported revenue of $21.27 billion versus the consensus estimate of $22.27 billion. Year-over-year, this was an increase of 22 percent. EPS came in at 21 cents, 6 cents worse than the average analyst estimate. Operating income increased 56% to $405 million in the fourth quarter. Operating margin grew to 5 percent in North America, versus 2.9 percent last last year. Additionally, Amazon's CEO highlighted Amazon's growth in eBooks.

"We're now seeing the transition we've been expecting," said Jeff Bezos, founder and CEO of Amazon.com. "After 5 years, eBooks is a multi-billion dollar category for us and growing fast – up approximately 70% last year. In contrast, our physical book sales experienced the lowest December growth rate in our 17 years as a book seller, up just 5%."

Looking ahead, Amazon.com sees Q1 sales of $15 to $16.6 billion, versus the consensus of $16.85 billion. Q1 operating income (loss) is expected to be between $(285) million and $65 million, compared to $192 million in the prior year period.

Shares of Amazon.com Inc. (AMZN) last traded at $281.39, up 8% from the close.


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