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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