Amazon shares dip on growth concerns

Thu Dec 29, 2011 1:47pm EST

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(Reuters) - Amazon.com Inc shares fell to their lowest level since late March on Thursday on concern about sales growth during the online retailer's crucial fourth quarter.

Goldman Sachs analysts said in a note from Wednesday that Amazon has typically bested overall online sales growth by 23 points.

comScore reported earlier this week that online holiday spending in the U.S. rose 15 percent to a record $35 billion from November 1 to December 26, versus the comparable period last year.

That would suggest a 38 percent increase in Amazon sales this season, below the 40 percent increase Wall Street expects, wrote Goldman, which expects 44 percent, including Kindle sales.

"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 for 4Q 2011," the analysts said.

Shares of Amazon fell as low as $166.97 in early trading on Thursday, the lowest level since late March. The stock recovered by midday to $173, down 0.5 percent.

Amazon shares reached almost $250 in October, but have dropped by about 30 percent since then. Shares of rival e-commerce company eBay have lost roughly 10 percent in the same period.

Amazon said on Thursday it has sold "well over" 1 million Kindle e-reader and tablet devices per week this month.

Goldman's 44 percent sales growth forecast for the fourth quarter, versus a year earlier, includes three to four percentage points of growth from Kindle device sales that the analysts said are not currently incorporated in Wall Street consensus estimates.

(Reporting By Phil Wahba and Alistair Barr; editing by Mark Porter and Tim Dobbyn)

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Comments (3)
DaveC99 wrote:
If it’s that easy for someone to “guess” how a company like Amazon’s earnings numbers would be, then why do we even need the earnings report from that company? Not sure why that dumb analyst Heather Bellini from Goldman Sachs issued something that’s basically useless and pointless as her analysis was not even based on all data sources as she admitted. I guess she probably didn’t do too well on her math back in grade schools.

Dec 29, 2011 11:13am EST  --  Report as abuse
FooBarUSA wrote:
The problem is that these so called analysts come from Harvard and other esteemed ivy league schools where doing just 80% is good enough.

Dec 30, 2011 6:31am EST  --  Report as abuse
FreedomRadio wrote:
Goldman expects? Hilarious. Analysts are astrologers.

Jan 01, 2012 12:20am EST  --  Report as abuse
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