THE world’s biggest online retailer Amazon has disappointed investors after it missed sales targets and said profits will take a knock as it ramps up investment.
The company said revenues jumped 36% to £8.2bn in the final quarter of 2010 as sales of electronic books for its Kindle device outsold paperbacks in America, but the figure still fell short of analysts’ expectations.
Profits climbed 8% to £261m but shares in Amazon fell by about 9% on Wall Street after the company said it expected earnings to drop in the current quarter as it invested more on technology.
Amazon does not break out figures for its UK business, but said its Kindle book reader was its bestselling product in the final quarter of 2010, followed by the Toy Story 3 DVD.
Amazon UK took orders for more than 2.3 million items on its busiest day in the run-up to Christmas on Monday, December 6.
Chris North, managing director of Amazon in the UK, said trading had been strong over the Christmas period although the snow in December meant Amazon had to warn customers that deliveries would take longer.
He said: “We had a strong performance and are continuing to support that by investing for the future. We are very bullish about our prospects in the UK, the sky is the limit.”
North said Amazon would create 750 jobs when it opened a new fulfilment centre to deal with orders in Dunfermline by the end of 2011.
Amazon’s latest venture has seen it add lingerie to its range and the company also took control of film and games subscription business Lovefilm in a deal reported to have valued the company at £200m. It also owns the film website IMDb.
North did not give details about sales of the Kindle reader and the electronic books that run on it in the UK, but said its popularity is growing.