Amazon knows how to bring in the revenue, profit not so much

Amazon has announced its Q4 earnings on Tuesday, confirming that while it can bring in the revenue as good as the rest of them, when it comes to making a profit it's still got a lot to learn.

The company has posted sales of $21.27 billion, up 22 per cent on the previous quarter, in the 90 days leading up to Christmas. But after taking all that money, Amazon managed to generate just $97m in profit.

It's still $97m of course, nothing to be sniffed at, but when you look at Apple and its ability to generate $13 billion of profit from $54.5 billion revenue, it starts to put Amazon's huge costs into perspective.

What's more troubling for shareholders is thatĀ Amazon isn't sure whether it will make a loss next quarter of $65m or $285m, as margins are squeezed even further as people shift away from physical books to electronic versions for the company's Kindle range.

"We're now seeing the transition we've been expecting," said Jeff Bezos, founder and CEO of Amazon.com. "After five years, eBooks is a multibillion-dollar category for us and growing fast - up approximately 70 per cent last year. In contrast, our physical book sales experienced the lowest December growth rate in our 17 years as a bookseller, up just 5 per cent.

"We're excited and very grateful to our customers for their response to Kindle and our ever expanding ecosystem and selection."

According to the company, its Kindle Fire HD was the most bought device from the company, for the second year in a row. At year-end, Kindle Fire HD, Kindle Fire, Kindle Paperwhite and Kindle held the top four spots on the Amazon worldwide bestseller charts since launch.



>