NEW YORK (TheStreet) -- Shares of Amazon.com (AMZN) - Get Amazon.com, Inc. Report are higher by 0.76% to $300.01 on heavy volume in afternoon trading Friday, after the online retail giant agreed to a multiyear deal for print and electronic books with MacmillanPublishers today, the Associated Press reports.
Amazon and Macmillan CEO John Sargent confirmed that they had agreed to terms for both print and electronic books, allowing Macmillan to set prices for e-books, the AP added.
The arrangement known as the "agency model," is similar to other agreements Amazon has reached in the past two months with publishers Hachette Book Group and Simon & Schuster,the AP noted.
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In 2010, Macmillan and Amazon had a public feud, when Amazon briefly removed "buy" buttons for all Macmillan releases.
About 4.39 million shares of Amazon have traded hands as of 1:30 p.m. today, compared to its average trading volume of about 3.92 million shares a day.
Separately, TheStreet Ratings team rates AMAZON.COM INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate AMAZON.COM INC (AMZN) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally disappointing historical performance in the stock itself, poor profit margins and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet & Catalog Retail industry. The net income has significantly decreased by 965.9% when compared to the same quarter one year ago, falling from -$41.00 million to -$437.00 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Internet & Catalog Retail industry and the overall market, AMAZON.COM INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The share price of AMAZON.COM INC has not done very well: it is down 19.58% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- The gross profit margin for AMAZON.COM INC is currently lower than what is desirable, coming in at 34.98%. Regardless of AMZN's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -2.12% trails the industry average.
- AMAZON.COM INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, AMAZON.COM INC turned its bottom line around by earning $0.58 versus -$0.10 in the prior year. For the next year, the market is expecting a contraction of 225.9% in earnings (-$0.73 versus $0.58).
- You can view the full analysis from the report here: AMZN Ratings Report