- Brandon Checketts
- On February 10, 2014
- 0 Comments
The E-commerce powerhouse Amazon.com had a great 2013 fourth quarter performance. Despite the share price dropping, Amazon’s income statements reported $25.6 billion in fourth quarter revenue which is a 20% increase during the same period in 2012. This year’s fourth quarter net income increased to $239 million. Last year’s fourth quarter net income was $97 million which means net income has increased by 146% during the same period in 2012. Amazon’s $239 million in income resulted in earning of 51 cents per share. This is more than doubles last year’s 21 cents per share during this period.
Even with all of the phenomenal growth Amazon is experiencing, Amazon’s share price took a hit because of their fourth quarter performance. Wall Street analysts predicted fourth quarter revenue to be closer to 26.5 billion and earnings per share to be 66 cents. This less than expected fourth quarter revenue has caused the share price to drop.
Amazon blames the less than expected revenues on some delays in shipping during the holidays. Amazon gave out free gift certificates and shipping refunds for those who paid for shipping to make up for the delays. Their fourth quarter earnings took a slight hit because of these expenses. Despite this hit, Amazon stated that it had a record-setting holiday season.
Amazon is still a very strong company with lots of growth ahead. For the full year, Amazon received $74.5 billion in revenue, net income of $274 million, and 59 cents of earnings per share. The previous year has been a great year for Amazon and has made up for their lackluster 2012 performance.
In the company’s press release, Jeff Bezos states, “”It’s a good time to be an Amazon customer. You can now read your Kindle gate-to-gate, get instant on-device tech support via our revolutionary Mayday button, and have packages delivered to your door even on Sundays.”
Not only is it a good time to be an Amazon customer, but it is also a good time to be an Amazon seller through Fulfillment by Amazon or FBA. FBA is a service where Amazon stores and ships the seller’s products. Along with storing and shipping products, FBA also provides inventory management and customer service. FBA grew by 65% the past year. In 2013, sellers using FBA have sold more than a billion units worldwide which amounted to tens of billions of dollars. More units were shipped in the fourth quarter of 2013 than the years 2009 and 2010 combined. This increase in unit volume shows that Fulfillment by Amazon is expanding very rapidly.
Amazon is currently discussing raising the popular Amazon Prime subscription $20 or $40 dollars because of higher fuel and shipping costs. This increase would bring in additional revenue to Amazon and increase earnings per share. The company is also bringing in more revenue through Fulfillment by Amazon fees because the number of people using this service is increasing each year. If Amazon continues growing at the current rate, they should eventually become one of the largest companies in the United States.