Amazon just delivered a pretty strong earnings report sending its stock higher in after-hours trading. Amazon beat expectations with $9.91 billion in sales for the quarter, a 51% jump on a year over year basis.
EPS came in better than expected at $0.41, though it was down on a year-over-year basis.
Amazon’s earnings release doesn’t reveal much, but CEO Jeff Bezos says the ad-supported Kindle 3G is now the best selling Kindle.
Here are the key stats:
EPS: $0.41 vs. $0.34 expected
Revenue: $9.91 billion versus $9.38 billion expected
Pro forma Operating Income: $386 million versus $375 million expected
Q3 Revenue Guidance: $10.3-$11.1 billion is above what the street was expecting. (JP Morgan was expecting $8.85-$9.65 billion)
Q3 operating income guidance: $20 million-$170 million which is well below what the street was expecting. (JP Morgan expected $275-$425 million.)
Head count continues to explode, with Amazon adding 5,300 new people in the quarter.
Citi analyst Mark Mahaney is baffled by the weak operating income, saying in a note: “Op Inc. Guide Is A Key Concern, As It Appears To Be Every Quarter. Possible drivers – Tablet launch expenses? Ramped up distribution centres? Expanded Web Services centres? Rockets to the moon? All of the above?… “
His take away on the quarter: “Our First Pass Take Is Incrementally Positive — 44% organic revenue growth is the fastest since 2001 (déjà-Bubble), with Kindle almost certainly a key factor, along with accelerating momentum into Consumer Staples, Apparel, and Web Services. AMZN is dramatically taking share in Online Retail. The pause here is that the company is also aggressively investing at the same time.”
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