14 DAY TRIAL // Amazon's financial results for the first quarter of the year had some surprises for investors, both good and bad. On the one hand, revenue was higher than analysts expected, on the other, rising expenses took a toll on income, which was below estimates.
Revenue was up 38 percent from the same quarter in 2010, reaching $9.86 billion, up from $7.13 billion. The change in exchange rates from last year had a positive impact which added $144 million to the bottom line.
Wall Street expected a revenue of $9.52 billion and earnings per share of 61 cents. While the revenue figures were surpassed by Amazon, earnings fell short.
Net income was at $201 million in the first quarter, meaning 44 cents per share, below the $299 million Amazon made in the first quarter of 2010, coming in at 66 cents per share.
"In the last 90 days, we announced Kindle with Special Offers, Kindle Library Lending, Audible audiobooks on Kindle, Appstore for Android, Amazon for Windows Phone 7, Checkout by Amazon in both Germany and the U.K., a Kindle Store in Germany, Cloud Drive, Cloud Player, and Prime Instant Video - just to call out a few of the things we've been working on," Jeff Bezos, founder and CEO of Amazon.com, said.
The message is clear, Amazon has a lot on its plate right now so expenses are bigger than ever, hence the drop in income.
"We love inventing on behalf of customers and have never been more excited about the long-term opportunities," Bezos added.
Amazon expects the same unpredictiveness in the second quarter and has issued very vague guidance numbers. Revenue is estimated at between $8.85 billion and $9.65 billion, a 35 percent to 47 percent growth.
Operating income is estimated at between $95 million and $245 million in the second quarter, compared to $322 million in Q1 2011 and $394 million in Q1 2010.