Earnings: Amazon Revenue Beats Street; Media Sales Up 7 Percent
This story was written by Rory Maher.
Amazon (NSDQ: AMZN) generated Q4 revenue of $4.89 billion and operating income of $244 millionrevenue growth that exceeded analyst consensus estimates of $4.75 billion, but below operating income consensus estimates of $268 million. The company said it expects second quarter revenue to grow between 6 percent and 17 percent, a range in line with analyst consensus estimates. Excluding foreign exchange fluctuations, revenue grew at essentially the same rate as in fourth quarter 2008 (25 percent vs. 24 percent), indicating Amazon continues to increase its dominant share of the online e-commerce market. Some quick highlights:
North American sales grew 21 percent during the quarter to $2.58 billion.
International sales grew 15 percent to $2.31 billion.
Worldwide media sales grew 7 percent to $2.72 billion, indicating the company continues to differentiate beyond books.
On the call: CEO Jeff Bezos and CFO Thomas Szkutak revealed some of the ways they improved the cost of selling the company's goods during the quarter and continue to see ways they can improve the company's operations in the future.
Specifically:
The company was careful not to hold too much inventory during the quarter (which can increase the cost of sales) and worked hard with its vendors to decrease the cost of delivering goods to its customers (for example, sending more goods per shipment to its fulfillment centers) all which helped improve gross profit margins.
When asked where he saw areas to improve operating efficiency Bezos said that internal reviews indicate he could improve efficiency across all product and operational lines, though he didn't provide specifics.
Not surprisingly Szutak said higher priced goods were not selling well versus last year, but lower priced goods were selling fairly well in comparison.
By Rory Maher