Amazon.com FTW! 9% Increase in 4Q Net Income

Amazon.com has posted a 9% increase in fourth quarter net income and an 18% rise in sales.  As a result, Amazon’s shares rose to over $56 per share in after hours trading.  This past holiday season, Amazon had their best ever despite the challenges faced by all retail companies.  Amazon reported a net income of $225 million for the quarter, up from $207 million a year ago.  Net sales increased 18% to $6.7 billion.

Jeff Bezos, CEO of Amazon.com mentioned that the Kindle ebook reader helped with the increase in net income.  But Bezos did not disclose how many units were sold.  Amazon sold out of Kindles for the second consecutive holiday season.  Amazon expects their first quarter sales to grow about 9-19% or about $4.53 billion to $4.93 billion.  Wall Street projects growth to be about 11%.

Gross margin slid to 20.1% from 20.6%.  Amazon.com’s free shipping, lower prices, and expanded product lines provided Amazon the opportunity to gain market share from a lot of their competition.  Amazon’s international sales increased by 19% to $3.07 billion.  A lot of Amazon.com’s increase in profit is due to people favoring fixed price websites over auctions like eBay.com.

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