Amazon just reported earnings for the first quarter of 2012. Net sales increased 34% to $13.18 billion in the first quarter, compared with $9.86 billion in first quarter 2011. Net income decreased 35% to $130 million in the first quarter, or $0.28 per diluted share, compared with net income of $201 million, or $0.44 per diluted share, in first quarter 2011. The company beat Wall Street expectations; analysts expected a profit of $0.07 per share on revenue of $12.9 billion for the quarter.
As with Apple, Amazon has utterly shattered Wall Street predictions, thus further undermining the clairvoyance of various analysts.
Jeff Bezos, above many of his peers, has demonstrated an acute awareness of what it takes to succeed in the current technological climate. With heavy re-investment in recent years, Wall Street analysts have been quick to point out low profits and high expenditure, but few have taken a moment to consider the long-term ramifications of such maneuvering.
Thanks to Mr. Bezos’ ability, Amazon has built a competitive, growing, and stable infrastructure, thereby ensuring business growth for the future. While this may have shaken the confidence of various near-sighted analysts from time to time, the fact is that Amazon is doing very well.
Unlike the vast majority of technology mainstays, Amazon appears to be one of the most aspirational, driven, and promising companies on the market. Built upon sound ideals, good business, and an avid penchant for infrastructural investment, the future looks good for the Seattle-based retailer.
Although income is down, I tend not to view this as a sign of things to come. The retail market is volatile, particularly once the Western holiday season has passed. Given the quantity of re-investment into the company’s framework, I expect Amazon to unveil plenty of income-generating initiatives in the near future. I do not wish to sound like an apologist but, Bezos’ evident business acumen in mind, I find it difficult to feel pessimistic about Amazon’s prospects.
As I’ve said before, competition is a very good thing and, I imagine, Amazon is going to continue to encroach on some otherwise steadfast marketplaces in the coming years.
Amazon’s press release is available here.