Amazon released its Q4 results for 2012 yesterday, and the figures showed that the company’s income was down by almost half compared to the same period a year ago, from $177 million to $97 million. Jeff Bezos was sanguine about the results, despite an increase of 22% in sales, calling it “the transition we’ve been expecting.”
And so what of the firm’s investors? Despite the fact that it lost money, its profit margins were up to 3.2%, a rise of 0.5 of 1% year-on-year. which is what caught the eye of all those money men. The firm’s share price closed 10% up during after-hours trading–compare that with investor behavior after Apple’s Q4 results last week.
One of the reasons for this is, as Bezos pointed out in 2012, Amazon makes no profit on its hardware. Back then, he told the BBC that the firm’s profits relied on its continuing relationship with its customers. He did, however, point out yesterday that while sales of physical books were up by just 5%, e-book sales had grown by 70% in 2012. And, the press release pointed out, the Kindle Fire is Amazon’s most popular item on the site, with the company’s other tablets holding the next three spots. Some transition.