Stock Watch: Amazon.com Looks Toward Profits

Amazon.com (Nasdaq: AMZN) is thinking profits. Really.

As expected, Amazon.com reported a huge fourth quarter loss after the markets closed on Wednesday, but it looks like the worst could be over for the company. Shares of Amazon.com are up 11-9/16 to 80 — a gain of nearly 17 percent — in early trading today, as investors are enthused by the possibility of the company actually making money.

Amazon.com CEO Jeff Bezos said Wednesday that his company “will drive toward profitability.”

On Wednesday, Amazon.com reported a fourth quarter net loss of $185 million, or 55 cents per share. Revenue growth was strong, with sales hitting $676 million — a 17 percent gain over the $253 million reported in the same quarter a year ago.

Amazon.com CFO Warren Jenson said that his company’s fourth quarter was a “high point” for losses. What’s more, Amazon.com’s original bread-and-butter book business actually turned a profit in the fourth quarter, overall customer accounts rose to 16.9 million, and repeat customers represented 73 percent of fourth quarter orders.

Amazon.com is not a cheap stock, but the thinking among many investors is that there is no doubt that the company will be one of the survivors of the eventual e-commerce shakeout. Amazon.com has stakes in businesses that sell everything from health products and pet supplies to spoken-word audio and luxury goods. Amazon.com’s biggest asset is its huge customer base, which allows it to make favorable deals with other companies that want to reach its customers.

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