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Profits down at Amazon despite soaring sales

This is an archived article - we have removed images and other assets but have left the text unchanged for your reference has reported profits down by 58% and predicted they would fall by as much as 162% in coming months. The forecast came as it reported sales up by more than a third in the fourth quarter of its financial year and by more than 40% in its full-year.

The company, whose website is the UK’s biggest online trader, last night unveiled a 35% rise in sales to $17.43bn (£11.04bn) in the three months to December 31, up from $12.95bn (£8.20bn) in the same period of 2010. During the quarter, the new Kindle Fire electronic reader was the best-selling product on both its US and European websites, including, with sales of all Kindles rising by 177%. And in the full-year, to December 31, sales rose by 41% to $48.08bn (£30.45bn).

“We are grateful to the millions of customers who purchased the Kindle Fire and Kindle e-reader devices this holiday season, making Kindle our bestselling product across both the U.S. and Europe,” said Jeff Bezos, founder and CEO of

Sales at Amazon’s international websites, including the UK, rose by 31% to $7.53bn (£4.77bn) in the fourth quarter of the year, while North American sales were up by 37% to $9.9bn (£6.27bn).

But while sales soared, costs also rose as the company invested in technology and infrastructure, and net income for the quarter fell by 58% to $177m (£144m), down from $416m (£263.4m) last year. In the full year, it fell by 45% to $631m (£399m).

Looking to the future, Amazon predicted sales would continue to rise, to between $12bn (£7.59bn)– 22% up on the previous year – and $13.4bn (£8.48bn) – 36% up on the previous year. But operating income, it said, might come in at a loss, as it forecast profits falling by between 69%, to $100m (£63.6m), and 162%, to a loss of $200m (£126.6m).

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