Amazon sales rise in holiday quarter, shares jump
By Deepa Seetharaman
SAN FRANCISCO (Reuters) - Amazon.com Inc reported stronger than expected earnings on Thursday as North American sales surged during the crucial holiday quarter, sending its shares up 9 percent.
The online commerce giant, which gets about a third of its revenue from October to December, reported earnings of 45 cents a share, trouncing Wall Street's average prediction for 17 cents.
Revenue climbed 15 percent to $29.3 billion in the quarter, compared to an average analyst estimate of nearly $30 billion. However, revenue rose 18 percent if $895 million in an unfavorable impact from year-over-year changes in foreign exchange rates were excluded, executives said on a conference call.
The sharply higher profit was a welcome surprise for Wall Street, which has clamored for Amazon to come to grips with its growing investments in everything from Hollywood-style television productions, and cloud computing and consumer devices with mixed success.
In a conference call with reporters, Chief Financial Officer Tom Szkutak said Amazon is putting "a lot more energy around making sure we get great productivity around our various fixed and variable assets."
Even so, few analysts expect Chief Executive Officer Jeff Bezos will rein in his spending significantly this year, especially as Amazon beefs up its $99-a-year Prime membership program, which offers standard two-day shipping, streaming video and unlimited photo storage among other perks.
"I did see some signs of expense control but it was more or less driven by top line growth into the holiday season," S&P Capital IQ analyst Tuna Amobi said. They haven't indicated any kind of shift in terms of investments.
"It just seems like foreign exchange was not as much of a headwind as believed." Continued...