Why Amazon Fell Short: The Real Story
NEW YORK (TheStreet) -- Amazon's (AMZN) - Get Report revenues have often come out to wild acclaim, while profits suffer all sorts of trials and suffering, as the company invested in future growth. But this time was different.
In the company's fourth quarter, reported after the stock market's close yesterday, sales disappointed. That's right: Amazon came in light on the top line.
Considering, the media should have pointed this out as a strange turn of events. More to the point, they should have examined why Amazon's revenue line was an uncharacteristic concern. After all, you can't understand the quarter or judge the worth of any assurances Amazon gives about the future if you can't adequately pinpoint what went wrong in the fourth quarter and why.
Too much of the media, though, did not even attempt the why. Investor's Business Daily was typical, noting that sales "surged" 35% to $17.43 billion, but still fell "well short of analyst views of $18.25 billion." They didn't mention the uncommon nature of the sales shortfall, though. Worse, they told us that the disappointment came "despite strong sales of the new Kindle Fire tablet," but never even attempt to provide an alternative reason.
In an article entitled "For Now, I Wouldn't Touch It," Seeking Alpha didn't even touch upon the quarter's top line coming in light, much less any reasons.
The Wall Street Journal
(NWS) - Get Report
, mercifully, did both, if at the end of their coverage. They pointed to a weak economy and good weather, which they said caused more consumers to shop at brick and mortar stores.
The New York Times did best. They showcased the issue in the headline: "Amazon's Revenues Disappoint," emphasized it in the lead: "Amazon.com's plans for world domination hit a slight bump on Tuesday" and touched upon everything from lackluster video game sales to Thailand flooding induced supply problems, to a potential "buy local" backlash as causes.
Amazon's revenue shortfall does not condemn them, but cannot pass unnoticed.
At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.
Marek Fuchs was a stockbroker for Shearson Lehman Brothers and a money manager before becoming a journalist who wrote The New York Times' "County Lines" column for six years. He also did back-up beat coverage of The New York Knicks for the paper's Sports section for two seasons and covered other professional and collegiate sports. He has contributed frequently to many of the Times' other sections, including National, Metro, Escapes, Style, Real Estate, Arts & Leisure, Travel, Money & Business, Circuits and the Op-Ed Page.
For his "Business Press Maven" column on how business and finance are covered by the media, Fuchs was named best business journalist critic in the nation by the Talking Biz website at The University of North Carolina School of Journalism and Mass Communication. Fuchs is a frequent speaker on the business media, in venues ranging from National Public Radio to the annual conference of the Society of American Business Editors and Writers.
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