Photo: Dylan Love
Amazon slammed through earnings expectations for the first quarter of 2012, posting EPS of $0.28 on revenue of $13.18 billion. (The release is here.)The stock is up more than 14% after hours on the news.
The company offered Q2 guidance of $11.9 to $13.3 billion in revenue. It also expects income or loss to be between -$240 million (operating loss) and $40 million (operating profit).
Wall Street was expecting EPS of $0.07 on $12.90 billion in revenue, but estimates varied widely, with some analysts predicting a loss.
Amazon boasted that 16 of its top 100 selling book titles are exclusive to the Kindle Store, and noted that Amazon Prime members can borrow any Kindle title for free through the lending library. But the company has still never given any sales stats on actual Kindles.
Digging in a little bit:
- North American sales were $7.43 billion, up 36% from a year ago.
- International sales were $5.76 billion, up 32%
- Media sales were $4.71 billion, up 19%
- Electronics and other general merchandise sales were $7.97 billion, up 43% from last year.
- Operating expenses for the quarter were $12.99 billion, up 36% from last year. This could be a result of higher cost of goods associated with the Kindle Fire, and the continuing buildout of new warehouses and Amazon Web Services.
There were a few points of interest from the earnings call:
- “Our results are inherently unpredictable.” No kidding. Wall Street was way off this quarter, and last quarter too. Basically, it’s impossible to forecast demand.
- They expect capital expenditures of $800 to $900 million next quarter.
- They’re still building 13 fulfillment centres in 2012, as previously announced.
- On the call, Amazon refused to answer a question about traction of apps in the Amazon App Store: “It’s early.”
- So where can they improve efficiency? They’re trying across the board. “Too many to list here today.” Also opportunities to partner with vendors more to get better savings and prices for customers. But newer products have more room to improve — “more basis points.”
- Weak product categories this quarter: some issues with cameras, audio/video equipment related to the Thailand floods. But were able to use lots of vendors to bulk up supply, or sell through third parties who had inventory.
- Strong product categories: Kindle globally, AWS growing very very fast.
- Purchased $960 million of stock during the quarter, have another $700 or $800 million left in the current authorization.
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