Monday, January 31, 2011

Amazon Talks to Stock Analysts

I love Seeking Alpha. It's a website that posts the transcripts of the conference calls between public companies' management and the analysts who follow the companies' stock.

Seeking Alpha has now posted the transcript of the question-and-answer session on Thursday between Amazon and the analysts who follow their stock. Despite all the questions, Amazon said practically nothing. Almost every question was greeted with an expansive, but empty, cheeriness. In the approximately twenty questions, I counted eighteen "great," seventeen "well," sixteen "excited" or "exciting," and fourteen "pleased."

Amazon's spokesman during the call was Tom Szkutak, Chief Financial Officer and senior vice president. Szkutak came to Amazon eight years ago from General Electric.

Seeking Alpha allows me to quote up to 400 words. I tried to pick answers where something was actually said. The pickin's were pretty slim.

[From Youssef Squali of Jefferies & Company, Inc.]
...can you tell us how many distribution centers you actually had at the end of 2010?

We had approximately 52 at the end of 2010. We added 13 last year. We will add more fulfillment centers this year. We ... aren't saying how many yet because again we're trying to determine what the growth rate will be.

[From Youssef Squali of Jefferies & Company, Inc.]
Are you quantifying CapEx [capital expenditures] for Q1 [the current quarter]?

No, we haven't quantified the CapEx for Q1 ... But again, we will do what we need to do to support the growth in both the infrastructure and fulfillment.

[From Benjamin Schachter of Macquarie Research]
... the one question would be, all in Kindle hardware and software, the whole thing together; how is that impacting gross margin? And then overall, how should we think about how the agency model and the e-books? How that going to impact margin?

First off, we have a long-standing practice of not breaking out any individual products or categories. But what I can say about Kindle is it's growing very fast. We're extremely pleased with what we're seeing. We sold millions of devices in Q4. The content business, the content part of it is growing very fast ... We have Kindle content, eKindle book sales growing at a faster rate than paperbacks, which is really exciting. And so that business is going very well.

[James Mitchell of Goldman Sachs Group Inc.]
... is there any big obvious reason why international growth decelerated while the domestic growth accelerated?

In terms of the international growth specifically, if you look back to last year, we did have very strong media growth in international in Q4. You'll see that it's up 26% on a local currency basis, which is one of the strongest quarters we've had ... but there were certainly some impact from some of the weather that we saw in Europe during the month of December.

[James Mitchell of Goldman Sachs Group Inc.]
Is the fact that some of the e-books are being sold on an agency rather than on a consignment basis, is there acting as track on growth temporarily, in terms of your reported revenue?

Certainly, the agency piece is included in the numbers that we reported today. But in terms of the impact, we're not bringing that out. But again, we're very excited with the growth that we're seeing within books, e-books specifically and physical books are going well as well.

But although the conference call was a non-event, Publishers Marketplace pointed me toward the very interesting SEC paperwork which Jeff Bezos filed on Friday. He reported that he owns 19.5% of the shares of Amazon. When I multiplied his 88,135,951 shares times Friday's stock close of $171.14, I got $15 billion.

Not bad for seventeen years' work.

Go here to read the SEC filing.

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