Amazon Ends with Lower Earnings for the Fourth Quarter

A sharp decline in profitability was reported by Amazon Inc which has disappointed investors with big surprise on Wall Street. The company reported the net profit of $177 million or earnings of $0.38 per share for the quarter ending December 31st, 2011 as compared to net income of $416 million or $0.91 per share for the same period in prior year.

Revenue however increased by 35 percent to $17.4 billion mostly contributed by media sales which surged 15 percent while sales in general merchandise increased by 48 percent.

Analysts were expecting the company to reported earnings of $0.17 per share with revenue of $18.3 billion.  Analysts believe the lower profitability means weak demand for Kindle Fire which was highly anticipated before its launch.

The share price has been under pressure since the announcement of its quarterly results however gained 3.28 percent in today’s session to close at $187.68 with traded volume of 6.38 million shares. The share price is trading at a price to earnings of 136.06 times which raises serious concerns at this level.

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Alan Smalling

About Alan Smalling

Alan is the latest addition to our news and development team. He has worked with Pete previously on other financial websites. When we can keep him at low altitude, his contributions will mainly be focused on company news and new product launches.

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