Amazon stock plunges after its 2014 outlook dims
Online retailer's profit more than doubled to $239M in Q4
Amazon.com Inc shares plunged 11 per cent on Wall Street Friday, after it missed expectations for sales and profits during the crucial holiday period.
The stock started its fall after hours as the online retailer announced earnings and cautioned investors it may have an operating loss this quarter because shipping costs are up.
By the end of the day Friday, Amazon was down $44 to $358.69 US, more than 11 per cent, amid a general sell-off of shares. Amazon stock hit an all-time high of $408.06 last week.
Amazon's profit and revenue both grew in the latest quarter. It earned $239 million US, or 51 cents per share, in the October-December period, up from $97 million, or 21 cents per share, in the same period a year earlier.
Revenue grew 20 per cent in the fourth quarter, to $25.59 billion from $21.27 billion.
But its results fell below analysts' expectations of 74 cents per share on revenue of $26.05 billion, according to FactSet.
In the past, investors have overlooked Amazon’s thin profit margins because of the company's solid revenue growth and long-term prospects. But in its outlook Thursday, Amazon said it could lose up to $200 million or have only a modest return, in part because of higher shipping costs and the impact of a higher U.S. dollar.
Amazon’s business model has been focused on spending the money it makes to grow its business and expand into new areas, from movie streaming to e-readers and grocery delivery.
For the full year net income was $274 million, or $0.59 per diluted share, compared with net loss of $39 million, or $0.09 per diluted share, in 2012. Sales increased 22 per cent to $74.45 billion.
With files from the Associated Press