Amazon.com Inc. (NASDAQ: AMZN), the largest online retailer, is scheduled to release its fourth-quarter earnings after the closing bell on Thursday, January 27, 2011. Analysts, on average, expect the company to report earnings of 88 cents per share on revenue of $12.98 billion. In the year ago period, the company reported earnings of 85 cents per share on revenue of $9.52 billion.
Amazon.com, Inc. operates as an online retailer in North America and internationally. It also manufactures and sells the Kindle e-reader. The Company offers programs that enable sellers to sell their products on its Websites and their own branded Websites.
In the preceding third-quarter, the Seattle, Washington-based company's net income was $231 million, or 51 cents a share, compared to $199 million, or 45 cents a share, in the year-earlier quarter. Revenue climbed 39% to $7.56 billion from $5.45 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of 48 cents per share on revenue of $7.35 billion.
At its last earnings call in October, Amazon said that it expects fourth quarter revenue between $12.0 billion and $13.3 billion, or to grow between 26% and 40% compared with fourth quarter 2009. Operating income is expected to be between $360 million and $560 million, or between 24% decline and 18% growth compared with fourth quarter 2009.
The company has benefited from strong consumer demand for its Kindle e-reader, solid e-commerce growth and accelerating demand trends witnessed over the recent holiday period.
Amazon has been also working to broaden its business to dominate online retail. Earlier in November, the company bought Quidsi, the owner of Diapers.com and Soap.com, for $500 million in cash. The company also rewcently said that it will launch a bulk email-sending service aimed at businesses and developers. The product, called Amazon Simple Email Service, marks the online retail giant's latest effort to expand its Web services segment.
Amazon.com Inc. agreed to buy the remaining shares of Lovefilm International Ltd., a U.K.-based DVD and online film-rental service, to compete against rivals such as the U.S.’s Netflix Inc. Lovefilm rents movies and television shows by mail and also streams content to Internet-enabled television sets and game consoles. Amazon.com’s purchase is expected to close in the first quarter of 2011.
As usual, investors will be alert for any concrete details on sales of Amazon's Kindle e-reader. The company has never disclosed how many it has sold, though it has said the Kindle is its best-selling product and that millions of people read Kindle books on the device itself and on free Kindle apps for smart phones and computers. The company has brought down the price significantly on the e-reader devices — with its cheapest Wi-Fi-only device selling for just $139.
Still, Amazon’s high valuation cools the enthusiasm of some analysts. The company's stock currently trades at a forward P/E (fye 31-Dec-2011) of 50.92 and PEG Ratio (5 yr expected) of 2.53.
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