Amazon.co.uk increased Kindle e-book sales by five times in its fourth quarter but its parent company Amazon.com announced a sharp fall in profits as it failed to meet analysts' expectations in its financial results today. Meanwhile the company has had a setback in the US, with Barnes & Noble saying they will not stock physical books published by Amazon.com.
Amazon.com revealed in its fourth quarter net income plummeted by 58% to $177m, compared with net income of $416m in the same period in 2010. It recorded the loss in profit despite increasing revenue by 35% in the fourth quarter to $17.43bn (£11.06bn) compared with $12.95bn in fourth quarter 2010.
In the UK, Amazon said sales of Kindle e-books in the last three months had increased five-fold in comparison to the same period in 2010 and it received twice as many orders for Kindle e-readers in the run-up to Christmas than last year. While the Kindle was the best-selling product for the last quarter in 2011 for the UK, no e-books were in the top 10 bestselling products list—a departure from previous years where anywhere up to four have featured. The top 10 bestselling items list for the last quarter was dominated instead by DVDs, video games and music.
International net sales for the fourth quarter were $7,529m in 2011 compared to $5,737m in 2010. For the full year, international net sales in countries Amazon operates outside the US were $21,372m in comparison to $15,497m the previous year.
In its outlook for the first quarter, the online retailer said sales were likely to be between $12bn and $13.4bn, with a projected operating losses of anywhere between $200m to a profit of $100m. As the results were announced the Wall Street Journal reported shares of Amazon fell 8.8% to $177.27 in late trading in the US. For the full year, Amazon’s net sales increased 41% to $48bn, compared with $34.3bn the year before.
Meanwhile Barnes & Noble has said it will not stock physical books published by Amazon.com's publishing division in its retail stores, saying the move is a response to "Amazon's continued push for exclusivity with publishers, agents and the authors they represent", which has "undermined the industry as a whole".
In a statement released yesterday [31st January], B&N chief merchandising officer Jaime Carey said: "Barnes & Noble has made a decision not to stock Amazon published titles in our store showrooms. Our decision is based on Amazon's continued push for exclusivity with publishers, agents and the authors they represent. These exclusives have prohibited us from offering certain e-books to our customers.
"Their actions have undermined the industry as a whole and have prevented millions of customers from having access to content. It's clear to us that Amazon has proven they would not be a good publishing partner to Barnes & Noble as they continue to pull content off the market for their own self interest."
He added: "We don't get many requests for Amazon titles, but if customers wish to buy Amazon titles from us, we will make them available only online at bn.com."
This follows Amazon's new print licensing deal with Houghton Mifflin Harcourt, announced last week, which will mean HMH will print and distribute all titles from Amazon's East Coast Group adult imprint.