Amazon 4Q Earnings Up But Miss Targets

Posted: Jan 30 2014, 11:53pm CST | by , Updated: Jan 30 2014, 11:55pm CST, in News | Technology News

 

Amazon 4Q earnings up but miss targets
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Amazon posts higher 4th-quarter earnings, revenue but falls short of expectations

SEATTLE (AP) — Amazon's profit and revenue both grew in the latest quarter but its results fell below what Wall Street was expecting and shares of the world's biggest online retailer declined after-hours.

Amazon has long focused on spending the money it makes to grow its business and expand into new areas, from movie streaming to e-readers and even grocery delivery.

Investors have largely forgiven thin profit margins and zeroed in on the company's solid revenue growth and long-term prospects. It posted losses in two previous quarters due to rising operating costs.

Amazon said Thursday that it earned $239 million, or 51 cents per share, in the October-December period, which included the key holiday shopping period. That's up from $97 million, or 21 cents per share, in the same period a year earlier.

Revenue grew 20 percent in the fourth quarter, to $25.59 billion from $21.27 billion.

Analysts were expecting earnings of 74 cents per share on revenue of $26.05 billion, according to FactSet.

For the current quarter, Amazon is forecasting revenue of $18.2 billion and $19.9 billion. Analysts expect $19.67 billion.

Amazon also said it is considering a price increase for its popular Prime service, which currently costs $79 a year and offers free two-day shipping on most items. The company said it has not raised the price on Prime in the 9 years since its launch, even though shipping costs have increased and it has added new services, such as video streaming.

The company is considering raising the price of Prime by $20 to $40 in the U.S.

Shares of Seattle-based Amazon.com Inc. fell $18.01, or 4.5 percent, to $385 in extended trading after the results came out. They had initially shed 10 percent.

The stock had closed regular trading up $18.81, or nearly 5 percent, at $403.01. The stock hit a record high of $408.06 last week.

Source: AP

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