Don't flee Amazon because of the iPad
4th-quarter results could surprise investors concerned that Apple's new tablet might threaten Amazon's Kindle.
By Jeanine Poggi, TheStreet
Investors are concerned that an Apple tablet computer, which was unveiled today, could pose a threat to Amazon's Kindle electronic reader. While this is a possibility, the dominance of online sales during the holidays might bode well for Amazon.
Internet sales, on the whole, grew 5% to $27 billion during the period, according to comScore. Amazon is estimated to be among the biggest gainers of the holidays, even as it went head to head with Wal-Mart (WMT) and Target (TGT) over discounts.
According to comScore, Amazon's traffic soared 20% in the fourth quarter from the previous year. And for the third month in a row, the site has attracted more unique visitors than all of eBay's (EBAY) sites.
Of the top six retail sites, only Apple and Best Buy (BBY) experienced as much growth, with unique visitors up 25% and 15%, respectively.
Analysts are calling for earnings of 72 cents a share on revenue of $9.04 billion in the fourth quarter. Citigroup (C) analyst Mark Mahaney says these estimates are conservative, and Amazon could surpass them.
Amazon was upgraded Wednesday morning to “buy” from “hold” by Kaufman Bros. The firm expects strong fourth-quarter results, and says the stock offers is attractive now that it has fallen 15% since mid-December.
Amazon fought back by launching an international version of its Kindle. It also cut the price by $40.
While the company has not revealed how many Kindles it has sold, Amazon sold more e-books than hard copies for the first time ever by Christmas Day.
Last week, rival eBay reported better-than-expected fourth-quarter earnings, boosted by the sale of its Skype business and growth in PayPal.
Yesterday, eBay said it will cut auction fees for sellers who only list items occasionally, a move to gain more users. In those situations, eBay will take a cut from the final selling price.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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