Amazon Net Falls 45.2 Percent in Fourth Quarter; Company Posts Loss for Fiscal Year
SEATTLE-Spikes in operating expenses offset a healthy gain in sales to reduce Amazon.com's fourth-quarter net income by 45.2 percent, to $97 million. For the full fiscal year ending on Dec. 31, the website reported a net loss of $39 million, against net income last year of $631 million.
Total operating expenses were up 41.5 percent in dollars and 306 basis points as a percentage of sales, to 22.2 percent. Amazon posted significant increases in the expense categories of fulfillment, marketing, technology and content, and general and administrative. Plus, the company increased its provision for income taxes in the quarter by 126 percent.
Net sales in the quarter increased 22 percent to $21.3 billion. The result brought Amazon's net sales for the fiscal year to $61.1 billion, up 27.1 percent over the prior year.
Jeff Bezos, Amazon's founder and CEO, attributed part of the sales hike to consumers' response to the company's Kindle tablet category, whose sales jumped 70 percent last year. "We're excited and very grateful to our customers for their response to Kindle and our ever-expanding ecosystem and selection," Bezos said.
Amazon is projecting net sales for its fiscal first quarter this year to rise between 14 percent and 26 percent, to between $15 billion and $16.6 billion. It is also expecting the quarter to produce between a loss of $285 million to a gain of $65 million in operating income.