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Amazon.com Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: April 27, 2012 06:45AM

Amazon.com Inc. (AMZN) filed Quarterly Report for the period ended 2012-03-31. Amazon.com Inc has a market cap of $86.45 billion; its shares were traded at around $195 with a P/E ratio of 141.8 and P/S ratio of 1.8. Amazon.com Inc had an annual average earning growth of 18.2% over the past 5 years.



Highlight of Business Operations:

Our financial focus is on long-term, sustainable growth in free cash flow1. Free cash flow, a non-GAAP financial measure, was $1.15 billion for the trailing twelve months ended March 31, 2012, compared to $1.90 billion for the trailing twelve months ended March 31, 2011, a decrease of 39%. See “Non-GAAP Financial Measures” below for a reconciliation of free cash flow to cash provided by operating activities. The decrease in free cash flow for the trailing twelve months ended March 31, 2012, compared to the comparable prior year period was primarily due to increased capital expenditures, changes in working capital2,, and less net income, partially offset by decreases in noncash expenses, increases in deferred revenue, and increases in sales of gift certificates to customers. Tax benefits relating to excess stock-based compensation deductions are presented in the statement of cash flows as financing cash inflows; accordingly, as such tax benefits decline, a greater amount of cash is classified as operating cash inflow. Operating cash flows and free cash flows can be volatile and are sensitive to many factors, including changes in working capital, the timing and magnitude of capital expenditures, and our federal taxable income. Working capital at any specific point in time is subject to many variables, including seasonality, inventory management and category expansion, the timing of cash receipts and payments, vendor payment terms, and fluctuations in foreign exchange rates.

North America sales grew 36% in Q1 2012 compared to the comparable prior year period. The sales growth primarily reflects increased unit sales. Increased unit sales were driven largely by our continued efforts to reduce prices for our customers, including from our shipping offers, by sales in faster growing categories such as electronics and other general merchandise, by increased in-stock inventory availability, and by increased selection of product offerings.

International sales grew 31% in Q1 2012 compared to the comparable prior year period. The sales growth primarily reflects increased unit sales. Increased unit sales were driven largely by our continued efforts to reduce prices for our customers, including from our shipping offers, by sales in faster growing categories such as electronics and other general merchandise, by increased in-stock inventory availability, and by increased selection of product offerings. Additionally, changes in currency exchange rates impacted International net sales by $(55) million for Q1 2012 and $141 million for Q1 2011. We expect that, over time, our International segment will represent 50% or more of our consolidated net sales.

The increase in cost of sales in absolute dollars in Q1 2012 compared to the comparable prior year period is primarily due to increased product, digital content, and shipping costs resulting from increased sales.

The increase in fulfillment costs in absolute dollars in Q1 2012, compared to the comparable prior year period, is primarily due to variable costs corresponding with physical and digital product and services sales volume, inventory levels, and sales mix; costs from expanding fulfillment capacity; and payment processing and related transaction costs.

Read the The complete Report



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