Talk about a mixed picture from online retailer Amazon.com . On its surface, Amazon tells a major success story, especially in the face of an economic slowdown and worries of recession. The company meets the Street with 48 cents a share, but blows past revenue expectations, reporting $5.7 billion versus the $5.38 billion analysts anticipated.
We knew the company's sales would be strong: Amazon itself called this past holiday shopping season the best the company had ever seen.
The good news keeps humming as the company looks ahead to its first fiscal quarter and entire 2008: for the March quarter, Amazon now expects a March quarter revenue range of $3.95 billion to $4.15 billion, raising the mid-point from the $3.95 billion analysts projected. Same goes for full year: Amazon now expecting $18.75 billion to $19.75 billion when the Street was at $18.2 billion.
That's where the good news seems to fade. Doing quick math, the company's non-GAAP operating margins hit 5.8 percent, well below many on the Street who were north of 6 percent. That early pop in Amazon's shares, based on the big top-line beats, are quickly giving way to the concept that for some reason, Amazon hasn't come up with a way to transfer those hefty sales increases to the bottom line.