Amazon shares drop despite profit growth

Amazon shares drop despite profit growth

Amazon’s shares have fallen by 10% in after-hours trading after the online retailer failed to match analysts’ profit expectations in the run up to Christmas.

However, the online retailer still reported a significant increase in profit and sales for the October-December period in 2013.

It racked up net profits of $239m (£145m) in its fourth quarter, up from $97m during the same period a year ago, and sales also rose 20% to $25.59bn. However, share prices fell last night following the financial update after many analysts had predicted revenues closer to $26bn during the period.

The company does not break out UK and European sales, however. The company has previously focused on pumping money into business expansion, investing in warehouses and video streaming services and reported a loss in the previous two quarters.
In the quarter, Amazon’s international sales, which would include sales in the UK, rose by 12.7% to $10.3bn. Amazon UK said its highest selling book during the run up to Christmas was Alex Ferguson’s autobiography (Hodder).

The Financial Times has reported that Amazon is also considering charging 50% more on deliveries for Prime Customers. Currently, Prime offers customers unlimited shipping at no extra cost for an annual fee of $79 (£49), but the company said on Thursday it was considering increasing the fee by between $20 and $40 to allow it to ship goods more quickly in a competitive retail environment.

The Bookseller has previously reported the company decided to drop its free delivery option on book orders under £10 in January in the UK in a bid to entice more customers to become Amazon Prime members and receive free delivery.