Amazon.Com Q1 2012 Financial Report

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Yesterday released their first quarter financial results for 2012, and all seems to be going well. Net sales have increase by 34% to almost $13.2 billion as compared to the same period in 2011 ($9.9 billion). Operating cash flow is up 1% to $3.05 billion compared with $3.3 billion from the same time last year.

Unfortunately free cash flow decreased almost 40% and ended at $1.15 billion, as compared to $1.90 billion the year before. Not too hot. Common shares outstanding plus shares underlying stock-based awards totaled 464 million a the end of the quarter as compared to 466 million a year ago. The company purchased $960 million in stock or about 5.3 million shares. They had previously authorized a $2 billion authorization to buy the company's common stock.

Operating income came in at $192 million, contrasted to $322 million in the first quarter last year. Net income leo decreased to $130 million, which is a 35% decrease when compared to first quarter 2011 ($201 million). That's $0.28 per diluted share compared to $0.44 in 2011 Q1. Not so great.

Despite the less than stellar quarter for Amazon, there are many great things in the works for 2012. E-book readers and the Kindle store have been big contributors to Amazon's success this past quarter, and CEO Jeff Bezos has a lot of faith in their new products.

Jeff Bezos, founder and CEO of comments on the success of the Kindle store:

“I’m excited to announce that we now have more than 130,000 new, in-copyright books that are exclusive to the Kindle Store – you won’t find them anywhere else. They include many of our top bestsellers – in fact, 16 of our top 100 bestselling titles are exclusive to our store,”

“If you’re an Amazon Prime member, you don’t even need to buy these titles – you can borrow them for free – with no due dates – from our revolutionary Kindle Owners’ Lending Library. The Kindle Owners’ Lending Library is heavily used by Kindle owners, and it has extremely unusual features that both authors and customers love. Every time you borrow a book, the author gets paid – and we have an inexhaustible supply of each title so you never have to wait in a queue for the book you want. Kindle is the bestselling e-reader in the world by far, and I assure you we’ll keep working hard so that the Kindle Store remains yet another reason to buy a Kindle!”

Here's a look at some projections for the second quarter already underway:

* Net sales are expected to be between $11.9 billion and $13.3 billion, or to grow between 20% and 34% compared with second quarter 2011.

* Operating income (loss) is expected to be between $(260) million and $40 million, or between 229% decline and 80% decline compared with second quarter 2011.

* This guidance includes approximately $260 million for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional business acquisitions or investments are concluded and that there are no further revisions to stock-based compensation estimates.

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