Amazon Q1 sales up, net income down, as marketing expenses balloon

Share this content:

Amazon.com net sales increased 38% year-over-year to $9.86 billion in the first quarter of 2011, the company said April 26 in an earnings report. However, net income decreased 33% to $201 million in the quarter, compared with the prior year, as marketing expenses increased by $126 million.

Operating income also decreased, falling 18.3% to $322 million in the three-month period ending March 31. Marketing expenses for Q1 2011 increased 62.7% to $327 million for the Seattle, Wash.-based e-commerce company.

“The two primary paid marketing [outlets] are our associates network and sponsored search,” said Thomas Szkutak, CFO and SVP of Amazon, on an earnings call. “We are doing some more broad advertising related to the Kindle.”

North American segment sales, representing the company's US and Canadian sites, increased 45% to $5.47 billion compared with the first quarter of 2010.

Worldwide media sales grew 15% to $3.96 billion. Worldwide electronics and other general merchandise sales grew 59% to $5.59 billion in the quarter, compared with the prior year.

Jeff Bezos, Amazon's founder and CEO, did not speak during the earnings call.

Amazon's in-the-cloud services crashed for about four days from April 21 to April 25. First-quarter earnings were not affected by the issue, however, as the quarter ended March 31.

Net income in Q4 2010 improved by 8% to $416 million, compared with Q4 of 2009, while operating income dropped 2.5% to $494 million. Improved Q4 earnings were largely attributed to a successful holiday season.

close

Next Article in Multichannel Marketing

Sign up to our newsletters

Company of the Week

Brightcove is the world's leading video platform. The most innovative and respected brands confidently rely on Brightcove to solve their most demanding communication challenges because of the unmatched performance and flexibility of our platform, our global scale and reliability, and our award-winning service. With thousands of customers and an industry-leading suite of cloud video products, Brightcove enables customers to drive compelling business results.

Find out more here »

Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here

Relive the 2017 Marketing Hall of Femme

Click the image above