14 DAY TRIAL // Amazon revealed its fourth quarter financial results and, despite the big gains in both revenue and net income, they came below expectations leading to quite a sharp drop in share price, pre-market. Amazon boasted revenue in Q4 2010 of $12.95 billion, its first "$10 billion" quarter.
The poorer than expected results lead to a hammering in the stock market as Amazon shared dropped by almost 10 percent in extended trading.
Amazon shares are currently down more than 8 percent, before the market opens in New York later today.
"Net sales increased 36% to $12.95 billion in the fourth quarter, compared with $9.52 billion in fourth quarter 2009. Excluding the $139 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales would have grown 37% compared with fourth quarter 2009," Amazon said in a statement.
Analysts expected $13.01 billion in revenue for Q4 during a period of economic recovery and strong consumer demand. Q4 is also Amazon's biggest quarter of the year, like for most retailers, as sales pick up during the holiday season.
Despite Amazon coming very close to the mark, investors were not pleased. Still, this may be just the knee-jerk reaction and share prices may recover when the market starts trading or in a few days.
"Net income increased 8% to $416 million in the fourth quarter, or $0.91 per diluted share, compared with net income of $384 million, or $0.85 per diluted share, in fourth quarter 2009," Amazon also revealed. Analysts were expecting $0.88 earnings per share.
For the full year, revenue is up 40 percent, by over $10 billion. Amazon brought in $34.20 billion in 2010 compared to $24.51 billion in the previous year. Net income grew by 28 percent in 2010, reaching $1.15 billion, up from $902 million in 2009.