Summary
Amazon.com, Inc. reported its financial results for the second quarter and first half of 2012. The company experienced robust top-line growth, with consolidated net sales increasing by 29% year-over-year in the second quarter to $12.8 billion and by 32% for the first half of the year to $26.0 billion. This growth was driven by strong performance in both North America and International segments, with North America sales up 36% in Q2 and International sales up 22% in Q2. Despite this revenue expansion, operating income saw a significant decline, falling 47% year-over-year in the second quarter to $107 million, attributed to increased operating expenses, particularly in fulfillment, technology, and content, which outpaced sales growth. While revenue growth remains a key positive, investors should note the pressure on profitability. The company continued to invest heavily in its infrastructure and technology, evidenced by a substantial increase in capital expenditures and technology and content expenses. Net income for the quarter was a mere $7 million, a sharp decrease from $191 million in the prior year period, reflecting the impact of these investments and operational cost increases on the bottom line. The balance sheet shows a strong cash position, though reduced from the prior year-end, and a significant increase in goodwill, largely due to the acquisition of Kiva Systems.
Financial Highlights
48 data points| Revenue | $12.83B |
| Cost of Revenue | $9.49B |
| Gross Profit | $3.35B |
| Operating Expenses | $12.73B |
| Operating Income | $107.00M |
| Interest Expense | $21.00M |
| Net Income | $7.00M |
| EPS (Basic) | $0.00 |
| EPS (Diluted) | $0.00 |
| Shares Outstanding (Basic) | 9.02B |
| Shares Outstanding (Diluted) | 9.16B |
Key Highlights
- 1Consolidated net sales grew 29% year-over-year to $12.8 billion in Q2 2012, and 32% for the first six months of 2012 to $26.0 billion.
- 2North America segment sales increased by 36% in Q2 2012, while International segment sales grew by 22% in the same period.
- 3Operating income decreased significantly by 47% year-over-year to $107 million in Q2 2012, indicating margin pressure.
- 4Net income for Q2 2012 was $7 million, a substantial decrease from $191 million in Q2 2011.
- 5Capital expenditures increased significantly, with Q2 2012 spending at $657 million compared to $433 million in Q2 2011, reflecting ongoing investment in infrastructure.
- 6Goodwill increased to $2.52 billion as of June 30, 2012, up from $1.96 billion at December 31, 2011, primarily due to the acquisition of Kiva Systems.
- 7The company repurchased $960 million of its common stock in Q1 2012 under its authorized repurchase program.