Amazon Profit Drops in Q4 2011 Earnings Report
February 1, 2012 10:42 AM
comment(s) - last by
Amazon CEO Jeff Bezos with Kindle Fire tablet
Analysts place blame for profit drop on increased spending on new products like the Kindle Fire
Amazon released its fourth-quarter earnings from 2011 today, showing off its massive holiday success with e-readers and its
Kindle Fire tablet
, yet still missing previous estimates.
Amazon reported a 35 percent increase in net sales from $12.95 billion in Q4 2010 to $17.43 billion in Q4 2011. Despite the increase, the company missed Bloomberg analyst expectations of $18.3 billion.
Amazon also saw a 58 percent drop in quarterly profit from $416 million, or 91 cents per share, in Q4 2010 to $177 million, or 38 cents per share, in Q4 2011.
Amazon reported $260 million in Q4 2011 operating income, down from $474 million in Q4 2010. Operating cash flow increased 12 percent to $3.90 billion, up from $3.50 billion in 2010, and free cash flow fell 17 percent to $2.09 billion from $2.52 billion in 2010.
The online retailer ended Q4 2011 with 56,200 employees, which is a 67 percent increase from Q4 2010.
For the full-year 2011, net sales jumped 41 percent from $34.20 billion in 2010 to $48.08 billion in 2011. Operating income fell 39 percent to $862 million from $1.41 billion in 2010, and net income dropped 45 percent to $631 million ($1.37 per share) from $1.15 billion ($2.53 per share) in 2010.
While Amazon's first entry into the tablet arena, the Kindle Fire, was
with both Fire and other Kindle e-reader unit sales increasing 177 percent during the nine-week holiday period ending December 31, 2011 from the same period in 2010, the products were clearly slow to pay off. Increased spending on the
as well as other new products and facilities put a dent in the company's profits.
“We are grateful to the millions of customers who purchased the Kindle Fire and Kindle e-reader devices this holiday season, making Kindle our bestselling product across both the U.S. and Europe,” said Jeff Bezos, founder and CEO of Amazon.com. “Our millions of third-party sellers had a tremendous holiday season with 65% unit growth and now represent 36% of total units sold.”
Amazon predicts its Q1 2012 revenue to land between $12 billion and $13.4 billion with a $200 million operating loss and $100 million operating profit. Analysts were hoping for a Q1 2012 revenue of $13.41 billion.
This article is over a month old, voting and posting comments is disabled
RE: Kindle Fire
2/1/2012 1:30:11 PM
I meant that it makes it easier for Amazon to sell products to Fire owners - Fire owners are likely going to use Amazon as their provider for video, music, e-books, and shopping, because it will be dead simple from the device.
All other tablets just don't have the content ecosystem. Samsung can make a device as nice as it wants, but Samsung has nothing to go with it. Samsung needs to make their money on the device up front, where as Amazon can make little to no money on the consumption device because they can recoup those costs with content later on.
I didn't mean Kindle books are locked to the Fire - I think Amazon has a great model with the Kindle software being on basically every platform. When DRM is non-restrictive like this, people seem to be OK with it (including me - I love my Kindle).
"There is a single light of science, and to brighten it anywhere is to brighten it everywhere." -- Isaac Asimov
Amazon Kindle Fire Review Round Up
November 14, 2011, 9:17 AM
Amazon Announces Variety of Apps for Kindle Fire
November 9, 2011, 12:14 PM
Amazon Could Sell Up to 5 Million Tablets in Q4 2011, Says Forrester Research
August 29, 2011, 8:58 PM
Dumb Twitter Controversy: Saudis Whine at Michelle Obama's Lack of Head Scarf
January 27, 2015, 4:57 PM
Google Fixes Homophobic "Bug" in its Translator
January 27, 2015, 2:31 PM
Chris Poole Retires From Role as 4Chan After a Decade of Success, Struggles
January 23, 2015, 1:45 PM
Study Shows People are Dumb as Ever With Passwords, Still Using "123456"
January 20, 2015, 3:19 PM
Site for "Glitter as a Service" Mail Pranks, ShipYourEnemiesGlitter, Launches
January 13, 2015, 2:22 PM
OS X Yosemite Compromises Security by Retrieving Embedded Email Images
January 13, 2015, 11:30 AM
Most Popular Articles
Under the Hood: How DirectX 11.3 and 12 Will Supercharge Windows 10 Gaming
January 23, 2015, 12:34 PM
Microsoft Shows Off Latest Windows 10 Build, Preps it for Next Week Release
January 21, 2015, 2:57 PM
BlackBerry CEO Claims Devs are Violating Net Neutrality by Not Supporting BB10
January 22, 2015, 4:37 PM
2016 Cadillac CTS-V Packs 640 hp Punch with 200 mph Reach
January 23, 2015, 3:25 PM
Will Google Become America's Fifth Major Carrier?
January 22, 2015, 12:42 PM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2015 DailyTech LLC. -
Terms, Conditions & Privacy Information