Amazon tops estimates, shares surge
The Internet retailer says fourth-quarter sales rose 18%, and the company offers an upbeat first-quarter outlook.
NEW YORK (CNNMoney.com) -- Amazon Inc. reported Thursday fourth-quarter earnings and revenue that beat Wall Street expectations despite a difficult environment for retail sales.
The news sent Amazon shares up 12% to $56.70 in after-hours trading.
The Seattle-based company reported net income of $225 million, or 52 cents a share, for the three months ended Dec. 31. That's an increase of 9% from earnings of $207 million, or 48 cents per share, a year ago.
Analysts surveyed by Thomson Reuters were expecting earnings of 39 cents per share.
Sales in the quarter rose 18% to $6.70 billion from $5.67 billion in the same period last year. Analysts expected sales of $6.44 billion.
Amazon said sales would have grown 24% if not for an unfavorable currency exchange rate.
Looking ahead, Amazon (AMZN, Fortune 500) said it expects first-quarter revenue in the range of $4.52 billion and $4.92 billion, the midpoint of which is above Wall Street's expectation for sales of $4.54 billion.
"This was a very, very strong quarter," said Sandeep Aggarwal, an analyst who covers Amazon for Collins Stewart. "Amazon clearly showed it can grow materially even though the overall economy is contracting."
Thursday's results showed growth across all segments of the business, reflecting "strong traction with Amazon's core offerings," Aggarwal added.
Sales in Amazon's media segment increased 9% versus last year, while the electronics and other general merchandise segment was up 31%. Amazon said sales of other items increased 34%.
Amazon, the world's largest online retailer, said in December that last year's holiday season was its "best ever," with customers ordering a record 13 items per minute on Dec. 15.
While Amazon did not offer sales figures for its popular electronic book reader, the Kindle, the company did say it saw "unusually strong demand" for the device in the fourth quarter.
"We remain relentlessly focused on serving customers with low prices, great selection and free shipping offers, including Amazon Prime," Jeff Bezos, Amazon's founder and chief executive, said in a statement.
Amazon Prime is a membership program that gives customers discounted shipping rates on certain items for an annual fee.
While Internet retailers have fared better than their brick-and-mortar rivals, many analysts fear that the recession's impact on consumer spending is beginning to undermine online commerce.
At the same time, some analysts say Amazon could benefit from the demise of certain offline retailers, such as Circuit City, which went out of business earlier this month, since fewer store-based competitors could drive customers online.
"It's difficult to say what, if any, short-term impacts you might see," from the deterioration in the broader retail environment, Bezos told analysts in a conference call.