Amazon's Profits Exceed Wall Street's Expectations
STEVE INSKEEP, HOST:
NPR's business news starts with impressive earnings for Amazon.
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INSKEEP: Amazon released its first-quarter earnings for 2012, which far exceeded Wall Street expectations. As NPR's Steve Henn reports, that sent Amazon's stock price soaring.
STEVE HENN, BYLINE: Amazon's total profits last quarter were $190 million. But in just two hours last night, Jeff Bezos - Amazon's founder and CEO - saw his net worth grow by more than 2 billion - all because Amazon stock shot up 15 percent. If this seems crazy to you...
BEN ROSE: Well, actually, I'm not going to talk you out of that.
HENN: Ben Rose is president of Battle Road Research, and follows Amazon's stock. He says to put this in perspective, consider the fact that while Amazon made $190 million in profits last quarter, McDonald's, which is now worth less on the stock market, earned more than 1.2 billion. Rose says the reason so many investors are excited about Amazon is that it's growing - fast.
ROSE: Basically, they have a very long-term, patient-growth strategy.
HENN: Rose says Amazon's strategy is to take over one type of business after another. First, it was books. Then, they attacked Best Buy in consumer electronics. Now, they're going after Netflix. And if that means Amazon doesn't book a lot of profits right now, so be it.
ROSE: That's exactly right. You know, there are other companies that would, you know, examine the different businesses that they're in...
HENN: ...and pull out of the least profitable ones. Not Amazon. Its mission is to just keep growing. And last quarter, revenue at Amazon grew 34 percent.
Steve Henn, NPR News, Silicon Valley. Transcript provided by NPR, Copyright NPR.