Amazon's Q1 2013 Results Show A Fall In Profits, Despite A Rise In Sales

Shares rose yesterday, around 2%.

Amazon released the financial results from the first quarter of 2013 Thursday, and showed a fall in profits, despite a rise in sales.

The firm brought in $16.07 billion in revenue, earning 18 cents per share. Sales increased, year-on-year, by 22%. Operating income was down by 6%, and its net income was down by 37%, from $130 million to $82 million. All this can only mean one thing. Amazon is spending big on something--but what?

According to the New York Times, Amazon is spending its money on distribution centers--here's one you might have seen earlier--while avoiding paying tax in some territories.

But it seems an odd thing to spend money on when you remember just how much of Amazon's sales come from data--music, e-books, movies and such--Amazon's e-book business grew by 70% last year. It is busy growing its own content arm, and there are reports that there's an Apple TV rival in the Amazon pipeline.

Amazon's profit margin is just 0.51%--compare and contrast it with that of Apple, which is 37.5% (down by 10% from a year ago). Despite the huge difference in profits, shareholders are still keener on Jeff Bezos' firm than the iconic gadget maker-turned-digital seer.

[Image by Flickr user LollyKnit]

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