AuctionBytes Blog
Covering auctions, collectibles and marketplace selling.

AuctionBytes Blog The AuctionBytes Blog has been giving a voice to online merchants since its launch in 2005. Named one of the world's top 30 blogs in 2008 by "Blogging Heroes." Weigh in with your thoughts on the joys and pitfalls of selling online.
Thu Jan 29 2009 16:19:36

Amazon Announces Q4-2008 Earnings

By: Ina Steiner

Sponsored Link

Amazon.com posted its fourth-quarter 2008 earnings after market close today. Here's an excerpt of its press release, the full release will be posted on its website here. Conference call with analysts commences at 5 pm Eastern.

Amazon.com Announces Fourth Quarter Sales up 18% to $6.70 Billion; 2008 Free Cash Flow Grows 16% to $1.36 Billion

Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its fourth quarter ended December 31, 2008.

Operating cash flow was $1.70 billion in 2008, compared with $1.41 billion in 2007. Free cash flow increased 16% to $1.36 billion in 2008, compared with $1.18 billion in 2007.

Common shares outstanding plus shares underlying stock-based awards outstanding totaled 446 million on December 31, 2008, compared with 435 million a year ago.

Net sales increased 18% to $6.70 billion in the fourth quarter, compared with $5.67 billion in fourth quarter 2007. Excluding the $320 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales would have grown 24% compared with fourth quarter 2007.

Operating income was $272 million in the fourth quarter, compared with $271 million in fourth quarter 2007. Excluding the $26 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, operating income would have grown 10% compared with fourth quarter 2007.

Net income increased 9% to $225 million in the fourth quarter, or $0.52 per diluted share, compared with net income of $207 million, or $0.48 per diluted share, in fourth quarter 2007.

"We remain relentlessly focused on serving customers with low prices, great selection and free shipping offers, including Amazon Prime," said Jeff Bezos, founder and CEO of Amazon.com. "We're particularly grateful for the unusually strong demand for Kindle in the fourth quarter."

Full Year 2008

Net sales increased 29% to $19.17 billion, or 28% excluding the $127 million favorable impact from year-over-year changes in foreign exchange rates throughout the year, compared with $14.84 billion in 2007.

Operating income increased 28% to $842 million, or 27% excluding the $10 million favorable impact from year-over-year changes in foreign exchange rates throughout the year, compared with $655 million in 2007. Included in 2008 operating income is a $53 million non-cash gain recognized on the sale of the Company's European DVD rental assets.

Net income increased 36% to $645 million in 2008, or $1.49 per diluted share, compared with net income of $476 million, or $1.12 per diluted share, in 2007.

Highlights

    * North America segment sales, representing the Company's U.S. and Canadian sites, were $3.63 billion, up 18% from fourth quarter 2007.
    * International segment sales, representing the Company's U.K., German, Japanese, French and Chinese sites, were $3.07 billion, up 19% from fourth quarter 2007. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, International sales grew 31%.
    * Worldwide Media sales grew 9% to $3.64 billion, compared with $3.33 billion in fourth quarter 2007.
    * Worldwide Electronics & Other General Merchandise sales grew 31% to $2.89 billion, compared with $2.21 billion in fourth quarter 2007, and increased to 43% of worldwide net sales compared with 39%.
    * Amazon.com introduced Frustration-Free Packaging, a multi-year initiative designed to make it easier for consumers to liberate items from their packaging by eliminating hard plastic clamshell cases, plastic bindings and plastic-coated wire ties. Frustration-Free Packaging is also more environmentally friendly than traditional packaging. The program launched with products from leading manufacturers including Fisher-Price, Mattel, Microsoft and Transcend.
    * Amazon.com shipped over 3 million units worldwide in fourth quarter 2008 on behalf of sellers who utilized Fulfillment by Amazon.
    * Amazon.co.uk launched the Amazon MP3 music service, offering more than 4 million DRM-free songs from all four major and hundreds of independent labels that can be played on any MP3 player.
    * Amazon Web Services (AWS) launched Amazon CloudFront, a self-service, pay-as-you-go web service for content delivery enabling global content distribution and seamless integration with Amazon S3.
    * AWS launched the ability to run Microsoft Windows Server on Amazon Elastic Compute Cloud (Amazon EC2) and enabled customers to run their Amazon EC2 instances in two Availability Zones within a new European Region with full-service features like Elastic IP addresses and Amazon Elastic Block Store.
    * AWS introduced tiered pricing for Amazon S3, enabling customers' costs to decrease as their storage volume grows.
    * The Kindle Store contains the largest collection of e-books available anywhere in the world. Selection increased by 45,000 titles in the fourth quarter, bringing the total to 230,000 titles. One hundred three out of 112 current New York Times bestsellers are available and, along with most new releases, are priced at $9.99 or less. In addition, the Kindle Store recently added The Arizona Republic, The Baltimore Sun, The Orange County Register and USA Today and now offers newspapers from 8 of the top 10 metro areas in the United States.

Financial Guidance

The following forward-looking statements reflect Amazon.com's expectations as of January 29, 2009. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and consumer spending, world events, the rate of growth of the Internet and online commerce and the various factors detailed below.

First Quarter 2009 Guidance

    * Net sales are expected to be between $4.525 billion and $4.925 billion, or to grow between 9% and 19% compared with first quarter 2008.
    * Operating income is expected to be between $125 million and $210 million, or between 37% decline and 6% growth compared with first quarter 2008. This guidance includes approximately $75 million for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional business acquisitions or investments are concluded and that there are no further revisions to stock-based compensation estimates.

A conference call will be webcast live today at 2 p.m. PT/5 p.m. ET, and will be available for at least three months at www.amazon.com/ir. This call will contain forward-looking statements and other material information regarding the Company's financial and operating results.

These forward-looking statements are inherently difficult to predict. Actual results could differ materially for a variety of reasons, including, in addition to the factors discussed above, the amount that Amazon.com invests in new business opportunities and the timing of those investments, the mix of products sold to customers, the mix of net sales derived from products as compared with services, the extent to which we owe income taxes, competition, management of growth, potential fluctuations in operating results, international growth and expansion, the outcomes of legal proceedings and claims, fulfillment center optimization, risks of inventory management, seasonality, the degree to which the Company enters into, maintains and develops commercial agreements, acquisitions and strategic transactions, and risks of fulfillment throughput and productivity. Other risks and uncertainties include, among others, risks related to new products, services and technologies, system interruptions, indebtedness, government regulation and taxation, payments and fraud. In addition, the current global economic climate amplifies many of these risks. More information about factors that potentially could affect Amazon.com's financial results is included in Amazon.com's filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and subsequent filings.

About Amazon.com

Amazon.com, Inc. (NASDAQ: AMZN), a Fortune 500 company based in Seattle, opened on the World Wide Web in July 1995 and today offers Earth's Biggest Selection. Amazon.com, Inc. seeks to be Earth's most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices. Amazon.com and other sellers offer millions of unique new, refurbished and used items in categories such as Books; Movies, Music & Games; Digital Downloads; Computers & Office; Electronics; Home & Garden; Grocery, Health & Beauty; Toys, Kids & Baby; Apparel, Shoes & Jewelry; Sports & Outdoors; and Tools, Auto & Industrial.

Amazon Web Services provides Amazon's developer customers with access to in-the-cloud infrastructure services based on Amazon's own back-end technology platform, which developers can use to enable virtually any type of business. Examples of the services offered by Amazon Web Services are Amazon Elastic Compute Cloud (Amazon EC2), Amazon Simple Storage Service (Amazon S3), Amazon Elastic Block Store, Amazon SimpleDB, Amazon Simple Queue Service (Amazon SQS), Amazon Flexible Payments Service (Amazon FPS), Amazon Mechanical Turk and Amazon CloudFront.

Amazon and its affiliates operate websites, including www.amazon.com, www.amazon.co.uk, www.amazon.de, www.amazon.co.jp, www.amazon.fr, www.amazon.ca, and www.amazon.cn.

As used herein, "Amazon.com," "we," "our" and similar terms include Amazon.com, Inc., and its subsidiaries, unless the context indicates otherwise.




Comments (17) | Permalink

Readers Comments

Amazon Announces Q4-2008 Earnings   Amazon Announces Q4-2008 Earnings

by: You Must Know What Is Going On Here !!!

Thu Jan 29 16:27:40 2009

ONLY Amazon Employees and Trolls will post anything positive about these results.

And the BONANZLE Employees will post about how much eBay is suffering at the Expense of Amazon.

NOTHING SAID ON THESE BOARDS IS FROM ACTUAL SELLERS, ONLY THE STAFF OF THESE COMPANIES POST LIES HERE TO SPREAD BAD RUMORS ABOUT ONE ANOTHER.

It is sad that this is what Ina's Blog has turned into, nothing but stooges for these companies posting lies about one another.  What is the point anymore?


Amazon Announces Q4-2008 Earnings   Amazon Announces Q4-2008 Earnings

by: ebay=penny stock

Thu Jan 29 16:31:01 2009

@you must know what is going on here

You sound like a very depressed person.

BYE BYE DONNA HOLE

Amazon Announces Q4-2008 Earnings   Amazon Announces Q4-2008 Earnings

by: Pat

Thu Jan 29 16:35:52 2009

You must not get around much. All the blogs and forums get this type of type of shilling. Ina doesn't censor here, which is admirable. It's also more noticeable here because this blog gets tons more traffic and comments than any other. People like to yell where they can be heard, not in some dusty, lonely blog that only gets the same 5 visitors.

Ina, thank you and DON'T CHANGE A THING!!

Amazon Announces Q4-2008 Earnings   Amazon Announces Q4-2008 Earnings

by: 115834

Thu Jan 29 16:42:45 2009

Do a comparison with eBay and Amazon.

Amazon Announces Q4-2008 Earnings   Amazon Announces Q4-2008 Earnings

by: 923202

Thu Jan 29 16:46:14 2009

Well the NUMBERS don't work for anyone...what are they telling us?

Amazon Announces Q4-2008 Earnings   Amazon Announces Q4-2008 Earnings

by: What is missing....

Thu Jan 29 17:02:02 2009

What is missing are the details on how third party sellers on Amazon are doing vs. the AMAZON company itself.

Remember that in many categories Amazon competes directly with third party sellers.  Amazon also has tight arrangements with big retailers on their site that get preferential treatment that also compete with third party sellers.

So, how exactly are third party sellers on Amazon doing?  We are seeing decent sales there, but nothing like the growth we are experiencing on eBay.  Just becuase AMAZON is selling more does not mean the third party sellers are seeing all of that gain.

Amazon and eBay are NOT comparing apples to apples becuase eBay does NOT sell product, only a service.  Amazon completes directly with other sellers on their marketplace.  And much, if not most, of those sales figures are going into AMAZON's pockets not third party sellers on their site.

Oh wait.....who do I work for again.  I have to start writing that down somewhere.

Amazon Announces Q4-2008 Earnings   Amazon Announces Q4-2008 Earnings

by: MsFish213

Thu Jan 29 18:49:23 2009

Amazon has always been Ebays biggest competitor.  Why hasn't the economy adversely affected Amazon?  Ebay could have had it all.

Amazon Announces Q4-2008 Earnings   Amazon Announces Q4-2008 Earnings

by: JohnnyD

Thu Jan 29 19:15:28 2009

Ebay board of Directors can Thank their abusive CEO for the surge in sales at Amazon!  Thanks John Boy!  Amazon's numbers represent the loss in ebay's 4th Q, plus Amazon's normal growth trend.

What's sad is that this news will cause Boy John to try to mimmick Amazon even more, instead of going back to 'classic ebay' and getting the ebay sellers (who also buy) back.  The more ebay tries to be Amazon, the more sellers they lose to Amazon.

I'll bet that if Amazon bought ebay tomorrow, Amazon would reverse every Destructive Innovation John Boy made, so the sellers (who also buy) would go back to classic ebay and make ebay profitable and fun again.  Amazon would realize that ebay's attempt to be Amazon was a huge mistake for ebay!  Go Johnny Go, Go!

Amazon Announces Q4-2008 Earnings   Amazon Announces Q4-2008 Earnings

by: Lisa

Thu Jan 29 19:50:26 2009

I plan on getting an Amazon webstore as soon as I get my inventory at a higher level. Better prices, traffic, a company that knows what they're doing and where their headed. Run with the winners.

Amazon Announces Q4-2008 Earnings   Amazon Announces Q4-2008 Earnings

by: Franci

Thu Jan 29 22:12:11 2009

It's pretty clear now why eBay is trying to hard to be Amazon.  Amazon just beat the pants off eBay in 2008.

The problem is not what sellers are doing or what Amazon sells.  The problems for eBay is that the number of buyers on eBay is decreasing and on Amazon they are increasing....and we all know why.  Price, quantity, ease of purchse, quality, variety, and number ONE.....(drum roll)...first class customer service!!!

eBay is so outclassed it's just sad!!

Franci

Amazon Announces Q4-2008 Earnings   Amazon Announces Q4-2008 Earnings

by: Trowlin' f0r Dollars

Thu Jan 29 22:35:59 2009

''NOTHING SAID ON THESE BOARDS IS FROM ACTUAL SELLERS, ONLY THE STAFF OF THESE COMPANIES POST LIES HERE TO SPREAD BAD RUMORS ABOUT ONE ANOTHER.''

I post here frequently, and I've sold over a million dollars on ebay, and it used to be my only selling venue.  I now sell about 50/50 ebay/mywebsite and am fed up with the new ebay, so I'll be graduating to Amazon this year.  

If ebay gets it together, and gets rid of Donahoe/Norrington, I'll go back there, but nothing will change the damage they've done to themselves, and ebay will never ever be what it once was.

Either 2 sides to feedback, or no feedback at all.  Either 2 sides to DSRs, or no DSRs at all.  Best match will be a pull down option (at the bottom), and items ending soonest will be up top again.  No hiding listings, no preferential treatment for Diamond Sellers.  Go back to $3 listings, and stop encouraging listing padding.  Give users the ability to permanently OPT OUT of high bandwidth, resource hogging ''Experiences.'' Let users pay with the payment of their choice, whether it be cash, checks, or pig hooves, its their deal.  Drug test upper ebay management (frequently).  Treat your sellers as your customers, and their buyers as your guests.  

Of course, ebay needs their bubble to burst before they will let go of their stubborn power hungry notions of seller abuse, and alienating buyers from sellers.  Even losing this badly won't do it to ebay.  Ebay needs a complete bankruptcy in order to sweep out the weeds which have taken permanent root.

Ebay has broken the 10th commandment, and their covetousness and greed will swallow them whole.

Amazon Announces Q4-2008 Earnings   Amazon Announces Q4-2008 Earnings

by: MsFish213

Thu Jan 29 23:06:47 2009

@Trowlin' f0r Dollars-

Very well said.

Amazon Announces Q4-2008 Earnings   Amazon Announces Q4-2008 Earnings

by: Ebay's Slow Death

Fri Jan 30 04:05:43 2009

@Trowlin' f0r Dollars-

Yes, very well said!

''NOTHING SAID ON THESE BOARDS IS FROM ACTUAL SELLERS,...''

I have sold on Ebay for 12 years, and I went back to selling on Amazon about a year ago.  I'm one of those 3rd Party (3P) Sellers, and I'm doing very well with used books. I'm doing awful on Ebay, where I use to sell really well. And the stress on Ebay is constant. I have 100% feedback on both sites, and provide excellent customer service. But, on Ebay, you never know when you are going to have problems. The things I'm having the most problems with on Ebay right now, are my listings are not getting many views (I have ''Raised Search Standing'') and then when I do sell something, Buyers are slow to pay. I usually have to send them a reminder.

There is just no comparison between Selling or Buying on Ebay and Amazon. Amazon is far less stressful to sell on. You get the order, you get paid, and you rarely have problems with a Buyer. Amazon respects you, leaves you alone, and provides security. I really don't know about their customer service, because I have never had to use it.

So, I am Very Happy with Amazon, and Very Unhappy with Ebay. Also, I do my buying on Amazon now.  In fact, I just bought a new printer from one of their 3P Sellers. I wouldn't think of buying anything on Ebay anymore. So, how can I expect people to buy from me there?

I too yearn for the ''Classic Ebay'', but doubt very much we will ever see it again. JD has dug his hole way too deep!

Amazon Announces Q4-2008 Earnings   Amazon Announces Q4-2008 Earnings

by: Jonathan

Fri Jan 30 08:28:36 2009

I am only looking at my own numbers.  Over the past 2 years my numbers have flip flopped.  My Amazon sales are now 4 times more than eBay.  Just two years ago it was the other way around.

I use FBA and am not thrilled with it, but am happy enough for now.

Now I see eBay is talking about offering their own version of FBA (I guess we call it FBE) but I don't trust eBay, they spin too much and do everything they can to screw sellers.  My presence on eBay has become less and less every day and I expect to be gone soon.

While eBay may not be as bad I think they are, perception is key and eBay is doing nothing to change my perception as a seller as to how they feel about me as a seller.  I am glad Amazon is doing well, eBay management deserves to stand in food lines!

Amazon Announces Q4-2008 Earnings   Amazon Announces Q4-2008 Earnings

by: Karen

Fri Jan 30 11:21:20 2009

Trowlin' f0r Dollars-  Here here!  Well said, indeed.

Ebay's Donohoe didn't like the 'noise'.  Sure hopes he likes the peace and quiet...like the silence of an abandoned building.

Amazon Announces Q4-2008 Earnings   Amazon Announces Q4-2008 Earnings

This user has validated their user name. by: Ming the Merciless

Fri Jan 30 15:23:14 2009

Message to The Ho:

IT ISN'T THE ECONOMY, STUPID!

Amazon Announces Q4-2008 Earnings   Amazon Announces Q4-2008 Earnings

by: Ex Powerseller/buyer

Fri Jan 30 19:58:04 2009

Just a heads up to all who still sell on ebay.  As of 3:30PST 1/30/09, the 'new page view Experience' has been forced on all of us, so there's not way to opt out.  In the past, when they beta tested the new page 'Experience', sellers could opt out and their listing frames would go back to normal.  The opt out site was http://shop.ebay.com .  The process was to opt out, clear cashe, restart browser, and it would be normal again.

If you don't like being forced into the new page view ''Experience'' send emails to   viewitem-us@ebay.com

And explain why you don't like the bandwidth-hogging, individuality robbing one size fits all amazonian copy cat look of the new page ''Experience.''  

Ebay has completely lost my interest.



Login is required to post comments.
To sign in to leave a comment using your AB Verify User Name, fill in the form below. If you have not yet signed up for AB Verify, or if you'd like more information, go to the Registration Page
.

Login for AB Verify
Be sure and use your email address and password to log in.

 
Email:
Password:
 
 Forgot Your Password?
 Even though you are signed in with the AuctionBytes Blog, you will have to sign in to the EcommerceBytes blog. But you can sign in with your existing AB Verify info.