Amazon’s Sales Miss Estimates, Profit Drops 57% [View all]

[marmar]

(Bloomberg) Amazon.com Inc. (AMZN), the world’s largest Internet retailer, missed analysts’ fourth-quarter revenue estimates and reported a 57 percent decline in profit, dragged down by shipping costs and the money-losing Kindle Fire.

Net income fell to $177 million, or 38 cents a share, from $416 million, or 91 cents, a year earlier, the Seattle-based company said today in a statement. Sales rose 35 percent to $17.4 billion, compared with an estimate of $18.3 billion.

Chief Executive Officer Jeff Bezos is squeezing profit margins in search of growth, looking to add customers by pushing free shipping and offering its Kindle devices at cut-rate prices. That has conditioned investors to expect strong sales increases, making the latest results disappointing, said Colin Gillis, an analyst at BGC Partners LP in New York.

“To miss on the top line, that’s what breaks the momentum,” said Gillis, who recommends selling Amazon stock. “The bull case just breaks down.” ...............(more)

The complete piece is at: http://www.bloomberg.com/news/2012-01-31/amazon-s-sales-miss-estimates-profit-drops-as-expenses-surge-shares-drop.html