Amazon.com, Inc. Smashes Earnings Estimates, Misses Sales

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Shares of Amazon skyrocketed in after-hours trading, climbing as much as 7.84% to hit $336.66 per share

Amazon released the earnings results from its most recently completed quarter tonight, posting diluted earnings of 45 cents per share and basic earnings of 46 cents on $29.33 billion in revenue, a 15% increase. Analysts had been expecting the online retailer to report earnings of 18 cents per share on $29.7 billion in revenue. In the same quarter last year, Amazon posted net income of 51 cents per share on $25.59 billion in revenue.

Key metrics from Amazon’s earnings report

The online retailer reported a negative impact on net sales of $895 million in connection with currency exchange. Not counting that impact, net sales rose 18% year over year. Operating cash flow rose 25% to $6.84 billion for the trailing 12 months compared to $5.47 billion last year. Free cash flow declined from $2.03 billion at the end of 2013 to $1.95 billion at the end of 2014.

For the full year, net sales rose 20% year over year from $74.45 billion last year to $88.99 billion in all of 2014. Net losses for the full year were 52 cents per share, compared to 2013’s earnings of 59 cents per share.

Amazon updates Prime efforts

Amazon saw Prime membership improve 53% year over year, including 50% growth in the U.S. During the quarter, the company announced one- and two-hour deliveries in Manhattan and Prime Photos for unlimited photo storage.

“Prime is a one-of-a-kind, all-you-can-eat, physical-digital hybrid — in 2014 alone we paid billions of dollars for Prime shipping and invested $1.3 billion in Prime Instant Video,” said Amazon founder and CEO Jeff Bezos in a statement. “We’ll continue to work hard for our Prime members.”

Amazon has also made headway with original content, taking on Netflix with its Prime-exclusive series Transparent, which won two Golden Globes.

Amazon provides guidance

For the current quarter, Amazon expects net sales of between $20.9 billion and $22.9 billion, which would be a 6% to 16% growth rate year over year. The company expects to see income or loss to be between a loss of $450 million and income of $50 million for the quarter, compared to income of $146 million in last year’s first quarter.

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About the Author

Michelle Jones
Michelle Jones was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Michelle has been with ValueWalk since 2012 and is now our editor-in-chief. Email her at [email protected]

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