Strong Christmas Sales Boost Amazon Q4 Results

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Shares rise thanks to cloud, digital content and e-book gains

Amazon sales rose by 22 percent over the Christmas period and posted a better than expected profit in its latest set of quarterly results.

Net sales rose to 22 percent to $21.27 billion from $17.43 billion (£11bn) during the fourth quarter of 2011, while the company made $97 million in profit during the period, although this was still down from $177 million last year.

During the entire of 2012, net sales increased to $61.09 billion from $48.008 billion in 2011, while operating increase shrank from $862 million to $676 million. However, shares in Amazon rallied to record levels on receipt of the news, as the company’s investments in digital content, hardware, cloud services and infrastructure look set to boost profitability.

Amazon Q4 results

Amazon Kindle Fire topDuring the past year, Amazon has launched the Kindle Fire HD tablet and new versions of its Kindle e-reader, while Amazon Web Services has continued to expand, launching 59 services and features during 2012.

“We’re now seeing the transition we’ve been expecting,” said Jeff Bezos, founder and CEO of Amazon. “After five years, eBooks is a multi-billion dollar category for us and growing fast – up approximately 70 percent last year.

“In contrast, our physical book sales experienced the lowest December growth rate in our 17 years as a book seller, up just 5 percent.”

“We’re excited and very grateful to our customers for their response to Kindle and our ever expanding ecosystem and selection.”

The results will no doubt please shareholders, but British taxpayers will be less than thrilled. Amazon is one of a number of technology companies whose UK tax arrangements have been questioned.

A report suggested that Amazon generated sales of £3.3 billion in the UK, but paid no corporation tax on that income as it has operated as a pan-European company based in Luxembourg since 2006. Amazon UK is considered to be a ‘brand name’, with its employees providing services for Amazon EU Sarl.

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