Amazon Crushes Estimates, Shares Soar

louis vuitton outlet Amazon stunned investors on Thursday with the 1Q12 EPS results that beat consensus fourfold, and that vindicated CEO Jeff Bezos for his outsized investments. Analysts fretted about the substantial investments in infrastructure and digital content on the back of what looked like slowing demand for e-products, adding pressure to profits. But in the quarter, higher revenues a lower costs lifted in profits at the giant on-line retailer. Amazon shares jumped 15% to $225 in afterhours trading, rising to a valuation of 70 times forward earnings.  By comparison, the price-to-earnings ratio for the S&P 500 is 12 times and Apple trades at 13 times forward earnings. Amazon’s net sales were $13.2 B in the quarter compared with $10 B a year ago, a 34% rise driven largely by sales of the new Kindle Fire. Consensus expectations for revenues were $12.9 B. Operating income was $192 M compared with $322 million a year ago.

www.louisvuittonoutletjan.com EPS came in at a surprising $0.28, four times better than the consensus EPS estimates of $.07.  Maria Bartiromo did a double take as she read the results on CNBC after the close. Amazon’s stock is volatile as management makes surprise shifts to strategy with substantial capital investments and with long lags to positive cash flow. Amazon may be reaping benefits from previous investments. Amazon spent in three main areas: customer service centers for online retail; digital content, or e-books, games and videos; and network infrastructure for its cloud computing service. Amazon introduced the Kindle Fire tablet to compete with the New iPad from Apple (NASDAQ:AAPL). The Kindle Fire may sell at slight loss or breakeven, but its financials were not disclosed. 

louis vuitton outlet Bears who contended Amazon’s print-to-digital transition was slowing missed the mark. Sales of e-books, videos and games showed momentum, suggesting Amazon’s shift toward digital was on the upswing and gaining traction. Amazon is the number two content provider, behind Apple, which dwarfs the on-line retailer with three times the revenues. Both companies sell content and devices in on-line stores, but Apple has a far wider ecosystem, better brand and deeper product line.  Amazon launched an exclusive line of content (130 000 e-books) to differentiate its offerings and gain a competitive edge.