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Record holiday spending boosts Amazon revenues


RICK WILKING/REUTERS Amazon.com Inc said on Tuesday that fourth-quarter revenue jumped 22 per cent to $ 21.3 billion as the world’s largest Internet retailer grabbed a big share of online spending during the crucial holiday period. REUTERS/Rick Wilking/Files

Amazon.com Inc., the world’s largest Internet retailer, reported fourth-quarter sales that rose 22 per cent as more shoppers turned to its broad product selection and speedy shipping for holiday gifts.

Sales climbed to $ 21.3 billion (U.S.), the Seattle-based company said Tuesday in a statement. Analysts on average had projected $ 22.2 billion, according to data compiled by Bloomberg. Shares rose as much as 8.3 per cent in extended trading.

Chief Executive Officer Jeff Bezos is pumping money into new warehouses, seeking to give consumers a reason to choose Amazon over going to the mall by offering two-day delivery. The company announced 19 shipment hubs in the third quarter alone, a move that meant a 35 per cent increase in fulfillment costs from a year earlier. While the investment weighs on margins, it helped Amazon grab a bigger share of the record $ 42.3 billion spent online over the holidays, according to researcher ComScore Inc.

Amazon shares climbed as high as $ 282 (U.S.) after the report. They had fallen 5.7 per cent to $ 260.35 at the close in New York. The stock jumped 45 per cent in 2012.

Net income in the fourth quarter fell to $ 97 million, or 21 cents a share, from $ 177 million, or 38 cents, a year earlier, the company said.

First-quarter operating income will range from a loss of $ 285 million to profit of $ 65 million, Amazon said, while analysts on average had projected operating profit of $ 261.4 million. Sales will rise to $ 15 billion to $ 16.6 billion, compared with an average analyst estimate of $ 16.8 billion.

Amazon’s spending on warehouses and faster delivery may help it gain share in a worldwide e-commerce market that Devitt estimated will reach $ 1 trillion by 2016, up from $ 512 billion last year. By then, Amazon’s share will be 23.5 per cent, pushing the company’s total sales to $ 166 billion, he projected in a Jan. 6 note.

thestar.com – Business

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