Amazon profit margins expand in Q1
Amazon.com Inc's revenue growth has slowed down in the first quarter as the world's largest Internet retail struggled overseas.
Washington: Amazon.com Inc's revenue growth has slowed down in the first quarter as the world's largest Internet retail struggled overseas.
Their margins however, expanded on lower shipping expenses and the expansion of more profitable new businesses.
Amazon shares fell 1.9 percent to 269.43 dollars in after-hours trading on Thursday following the results, reports Fox News.
Amazon's revenue rose 22 percent to 16.07 billion dollars, propelled by growing sales of digital content, cloud-computing services and gains in its main retail business.
But it was a decline from 36 percent growth in the first quarter of 2012. Amazon has also struggled to grow in China and the CFO told analysts the company is still in "investment mode" in that country. Chief Financial Officer Tom Szkutak reported that total year-over-year unit growth, which measures the number of items Amazon sells, was 30 percent in the first quarter, down from 49 percent in the first quarter of 2012.
Amazon forecast second-quarter revenue of 14.5 billion dollars to 16.2 billion dollars and operating results from break-even to 350 million dollars. The latter guidance excludes stock-based compensation expenses and other items such as amortization of intangible assets.
Despite weaker growth and a cautious forecast, Amazon's results showed that the company is becoming more profitable. Amazon is building distribution warehouses closer to customers, reducing shipping costs.
It has also been charging third-party merchants on its marketplace higher fees for shipping and warehouse storage.