Amazon.com, Inc. (NASDAQ:AMZN) released its December quarter earnings after closing bell, missing the estimates of analysts. The company reported quarterly sales of $25.59 billion and earnings of 51 cents per share. Fourth quarter profits were $2.39 million.
Analysts had been expecting the online retailer to report earnings of 66 cents per share on revenue of $26.1 billion for the quarter. Shares fell as much as 10% in the wake of the weak earnings report although the silver lining may be the company’s sales, which rose 20% compared to the same quarter a year ago.
Breaking down Amazon’s results
Amazon.com, Inc. (NASDAQ:AMZN) reported a 31% increase in operating cash flow, which rose to $5.47 billion for the trailing 12 months. Free cash flow rose to $2.03 billion for the trailing 12 months, compared with $395 million for the year ending December 2012. Amazon said the free cash flow for the 12 months ending in 2012 included fourth quarter cash outflows for buying corporate office space and property in Seattle, Wash.
The online retailer reported a negative impact of $258 million from foreign exchange rates in the fourth quarter. Without that negative impact, net sales increased 22% compared to the same quarter a year ago.
Operating income rose 26% for the quarter to $510 million, compared to $405 million in the same quarter a year ago.
Amazon highlights bright areas
Amazon.com, Inc. (NASDAQ:AMZN) reported a record-setting holiday season for its membership program Amazon Prime. The company said it actually had to limit signups during some parts of the holiday season because it became so popular.
The company added nearly 10,000 more online videos to its Prime Instant Video, bringing its offerings to over 40,000 movies and TV episodes in 2013. Selections in the Kindle Owners’ Lending Library also rose, climbing from 250,000 books to over 475,000 books Kindle owners with Prime memberships can borrow for free.
Amazon.com, Inc. (NASDAQ:AMZN) also made a number of announcements regarding its Kindle Fire, like the faster than expected response time its customer service team was able to provide to Kindle users who tapped the Mayday button on their Kindle Fire HDX on Christmas day. The company also announced a new version of Kindle FreeTime and a software update for the Kindle Paperwhite, as well as the Australian Kindle Store and Kindle Matchbook.
Amazon provides guidance
For the current quarter, Amazon.com, Inc. (NASDAQ:AMZN) guided for net sales to be between $18.2 billion and $19.9 billion, which would be growth of between 13% and 24% compared to the same quarter a year ago. They expect to see operating income or loss to be between a loss of $200 million and income of $200 million. That’s compared to income of $181 million in the same quarter a year ago.
The company included $350 million for stock-based compensation and amortization.