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Amazon.comJustin Sullivan

Amazon.com Inc. posted holiday quarterly revenue that fell short of analysts' estimates and forecast disappointing first-quarter operating margins Thursday, and its shares fell almost 10 per cent.



Fourth-quarter revenue for the global online retailer was $12.95-billion (U.S.). Analysts on average forecast $13.01-billion.



Amazon's fourth-quarter operating profit margin was 3.7 against 5 a year earlier, a sign of how much Amazon and other retailers had to discount to attract customers during the holidays, analysts said.



"Topline still seems to be really strong, but to meet this demand they're having to invest in fulfillment and distribution and that's taking a little bit of a short-term margin toll," analyst Ken Sena at Evercore Partners said.



For the first quarter, Amazon said it expects revenue between $9.1-billion and $9.9-billion. Wall Street expects revenue of $9.31-billion, according to Thomson Reuters I/B/E/S.



Amazon expects first-quarter operating profit between $260-million and $385-million, including $140-million for stock-based compensation and asset amortization.



Excluding amortization, the forecast is $400-million to $525-million. Evercore's Mr. Sena said analysts expected $580-million.



Net income in the fourth quarter was $416-million, or 91 cents per share -- up from $384-million, or 85 cents per share, a year earlier. Analysts on average forecast 88 cents a share, according to Thomson Reuters I/B/E/S.



Amazon shares traded at $166.50, down 9.8 per cent, following the earnings report, after rising more than 5 percent to end at $184.45 on Nasdaq Thursday.

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