Amazon May Miss Q4 Estimates, Despite Selling More Than One Million Kindles a Week
Since its introduction 13 weeks ago, the Kindle Fire has become the best-selling, most-gifted and most-wished-for product on Amazon.
But that could be a problem.
The device sells for about the same amount ($199) as it costs to make (about $202).
Amazon’s stock fell as much as 4 percent this morning after Goldman Sachs suggested that the Seattle-based company could miss analysts’ sales estimates for the current period.
The stock has recovered some since early this morning, and is now trading down 1.6 percent, or $2.74, at $171.15.
According to Bloomberg, Goldman analyst Heather Bellini said in a note today that Amazon’s sales may grow 38 percent from a year earlier, to $17.9 billion, which is less than analysts’ average estimate of $18.2 billion.
Bellini based her analysis on a comScore report that found online shopping increased 15 percent this year, compared to last year’s holiday season. Since Amazon is the largest e-commerce provider, she reasons that it would be difficult to outperform the average by a wide margin.
“While the comScore numbers are just one data point which does not capture international sales or breakout individual companies’ sales, taken alone they seem to suggest the potential for downside risk to consensus forecasts,” Bellini wrote.
Ultimately, strong sales of the Kindle Fire could help Amazon hit its sales estimates, since it is counting on the device to serve as a platform for the sale of more content. But in the short term, the Fire could hurt the company’s bottom line, a possibility Bellini did not address in her report.
In addition to comScore’s numbers not capturing international sales, its report also does not capture sales from mobile devices. Amazon said the Kindle Fire was the best-selling product on Amazon’s mobile Web site and across all of its mobile applications.
In all, Amazon said it sold more than one million Kindles a week in December.
Bellini reiterated a “neutral” rating and a price target of $190.