Amazon’s first-quarter net income declines 37 per cent

The online retailer’s margins remain thin compared with its competitors.

New Statesman
Photograph: Getty Images.

Amazon.com has posted a net income of $82m for the first-quarter ended 31 March 2013, a year-on-year decline of 37 per cent, or 18 cents per share.

However, sales increased by 22 per cent to $16.1bn matching expectations. The online retailer also improved its gross profit margin during the quarter.

Amazon’s profitability was driven by its investment decisions as the company goes through periodic bursts of capital spending on new warehouses, data centres and devices.

While Amazon’s margins remain thin compared with its competitors, investors say its investments are welcome as they keep sales growing, reported the Financial Times.

Jeff Bezos, Amazon’s founder and CEO, in a statement, highlighted the recent release of original television shows from the company’s studio division, which is part of its strategy to win consumers confidence.

Tom Szkutak, CFO of Amazon, on a call with analysts, declined to comment on a report that Amazon is developing a set-top box for televisions.

Amazon’s shares grew in after-hours trading after the release of results, but settled down 2.9 per cent at $266.87.