From tommorow’s NY Times:
A glorious future beats a glorious past.
Shares in Amazon immediately jumped nearly 10 percent in after-hours trading, about the same amount that Apple fell after releasing its news.
What caught the eye of investors was that operating margins as a percent of consolidated sales rose to 3.2 percent, from 2.7 percent a year ago.
For more than a decade, Amazon has teetered between minimal profits and no profits. In 2012, it said Tuesday, it lost money. But Wall Street has always been more about promises than results, and Amazon is always on the verge of converting its overwhelming online presence into buckets of cash.
The short-term news Tuesday was not good. Earnings per share fell to 21 cents from 38 cents in the fourth quarter of 2011. Although fourth-quarter revenue went up 22 percent to $21.27 billion, both revenue and earnings did not meet expectations. Analysts had predicted revenue of $22.2 billion and earnings of 27 cents a share.
Forget about all that. What mattered was the improvement in margin.
That was bad advice. The stock is up almost 700 percent since then, hitting a record this month.
Shares in Amazon fell nearly $16 in regular trading Tuesday, to $260.35. After-hours, shares went up more than $22.
Some analysts are still skeptical.
Amazon continues to expand. Last year, the retailer announced it was building a million-square-foot warehouse in Patterson, Calif., about 85 miles southeast of San Francisco. Last week, it announced another million-square-foot warehouse barely 30 miles north of Patterson, in Tracy. It obviously has designs on fast (if not quite same-day) shipping to the seven million generally affluent, Internet-using residents of the Bay Area.
Many of those shoppers will be buying material that originated not with Amazon but with more than two million third-party sellers. The volume of items sold by these firms during the 2012 holidays was up 40 percent from 2011. Some of these sellers merely used Amazon to digitally display their goods, while others also used the retailer to ship it.