“Amazon’s fourth-quarter net income fell 45 percent, as sharply higher revenue failed to keep pace with increased spending on order fulfillment and digital content, a trend that’s become the norm for the world’s largest online retailer,” Barbara Ortutay reports for The Associated Press. “The company’s financial results missed Wall Street’s expectations — but investors sent the world’s top online retailer’s stock up more than 9 percent in after-hours trading. ‘It boggles the mind,’ said BGC Financial analyst Colin Gillis, who attributed the stock price jump to slightly stronger-than-expected operating income. ‘A lot of people scratch their head at the valuation given to Amazon and the support the stock has.'”
Ortutay reports, “Amazon’s profit margins have been thin because of heavy investments —and the deep discounts the company offers consumers. Even so, investors continue to be more than forgiving. Its stock price gained 45 percent in 2012. It has risen another 4 percent so far this year. Amazon.com Inc. said Tuesday that it earned $97 million, or 21 cents per share, in the October-December period. That’s down from $177 million, or 38 cents per share, in the same period a year earlier. Revenue for the crucial holiday quarter grew 22 percent to $21.27 billion from $17.43 billion. Analysts had expected earnings of 28 cents per share on revenue of $22.26 billion, according to a poll by FactSet.”
“Few large corporations are able to grow revenue at such a pace year after year. Apple Inc., the world’s most valuable public company, is a notable example. The iPad maker increased revenue by 29 percent in 2012, to $165 billion. Still, investors punished Apple’s stock after it reported earnings last week, due to signs that the company’s profit margin is shrinking and its iPhone faces stiffer competition in overseas markets,” Ortutay reports. “Seattle-based Amazon’s shares rose $24, or 9.2 percent, to $284.35 in after-hours trading.”
Read more in the full article here.
MacDailyNews Take: It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way… – Charles Dickens
[Thanks to MacDailyNews Readers “Tom” and “Jax44” for the heads up.]
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