First quarter sales at the leading online retailer surged 34% to $13.2 billion during the first quarter ended March 31, as the company continues to enjoy a huge competitive advantage by allowing customers to avoid paying sales tax.
Despite surging sales, net income at the company declined 35% to $130 million or 28 cents a share, compared with $201 million or 44 cents a share the prior years. Operating income also declined considerably, dropping to $192 million in the first quarter compared with $322 million in first quarter 2011.
The declines in net and operating income were not as severe as expected so shares reacted favorably in aftermarket trading and hit roughly $220 resulting in a lofty price to earnings ratio around 150.
Sales in the company’s North American segment increased 36% to $7.4 billion and international segment sales increased 31% to $5.8 billion. In terms of merchandise categories, worldwide media sales grew 19% to $4.7 billion while worldwide electronics and other general merchandise sales grew 43% to $8 billion.
Looking ahead to the second quarter, Amazon expects sales to grow between 20% and 34% to a range of $11.9 billion to $13.3 billion. Meanwhile, operating income is expected to range between a $260 million loss to a $40 million profit, which equates to a decline in the range of 229% to 80%.