Amazon net income dives
NEW YORK -- Amazon.com says its fourth-quarter net income fell 45 per cent, as higher revenue failed to keep pace with increased spending on order fulfilment and digital content.
Revenue, along with revenue guidance for the current quarter, missed Wall Street's expectations, but investors still sent the world's top online retailer's stock up more than 10 per cent in after-hours trading.
"It boggles the mind," said BGC Financial analyst Colin Gillis, who attributed the stock-price jump to slightly stronger-than-expected operating income. "A lot of people scratch their head at the valuation given to Amazon and the support the stock has."
Amazon.com Inc. said Tuesday it earned $97 million, or 21 cents per share, in the October-December period. That's down from $177 million, or 38 cents per share, in the same period a year earlier.
Revenue for the crucial holiday quarter grew 22 per cent to $21.27 billion from $17.43 billion.
Analysts had expected earnings of 28 cents per share on revenue of $22.26 billion, according to a poll by FactSet.
Ford profit up, shares drop
DEARBORN, Mich. -- Ford is posting record profits in North America, but it's not enough to quell unease about the company's prospects elsewhere.
Ford's shares dropped nearly five per cent Tuesday after the company said it expects to lose more money in Europe this year and break even in Asia and South America. The final straw for investors: Ford said sales will increase next year but profits should remain about the same, dashing hopes that margins will continue to grow.
The outlook "brings overly optimistic investor expectations back in check," Barclays analyst Brian Johnson said in a note to investors.
The No. 2 U.S. automaker posted a record pre-tax profit of $8.3 billion in North America in 2012, the result of a six-year turnaround orchestrated by CEO Alan Mulally. It's reaching back into that playbook to fix its operations in Europe, where it lost $1.75 billion. The European restructuring plan announced in October was one reason Ford's stock has been trading at levels not seen since 2011.
But Tuesday, Ford forecast a loss of $2 billion in Europe and company executives and Wall Street analysts reminded investors that improving the performance outside of North America -- in both Europe and Asia -- will take time.
"These things don't happen in three months, six months or even a year, but we will get there," chief financial officer Bob Shanks said in a phone call with investors and media.
Youth jobs loss will hurt
OTTAWA -- The loss of tens of thousands of youth jobs during the recession was not only painful for the young people involved, but will affect them and Canada's economy for years to come, says a new paper from TD Bank.
The report estimates the legacy of unemployment for the young lasts up to two decades after the event, and the hit to Canada's gross domestic product will be about 1.3 per cent -- or about $23 billion -- in 18 years.
That's fairly modest given the timeline, but the same can't be said of some European countries that have seen unemployment among young people rise to above 50 per cent in the aftermath of the 2008-09 financial crisis.
For Ireland, the economy could suffer a GDP drain of about 12 per cent over the next two decades, the paper calculates, followed by Spain, Greece and Portugal among the hardest-hit European countries.
"Being unemployed at a young age can have a long-lasting impact on an individual's career prospects" -- a phenomenon known as "scarring" -- the report, written by economist Martin Schwerdtfeger, states.
Confidence up, down
OTTAWA -- Canadian and U.S. consumers appear heading in opposite directions in terms of their confidence in the economy -- it's up in Canada and down south of the border.
The Conference Board of Canada's survey of consumer confidence in January shows the index rebounding strongly by 5.1 points to 83.1, the highest level since June 2011 and the first increase in four months.
Meanwhile, a similar survey by the conference board in the United States found confidence among consumers there plummeted this month to 58.6, the lowest level since November 2011.
The results are particularly baffling, given that most economists believe the U.S. is on the verge of a relatively strong economic performance in 2013 while the expectations for Canada, while not negative, are more modest.
Bank of Montreal economist Doug Porter says the U.S. result is most surprising to him, noting there are specific reasons why Canadians should be seeing the sunny side of the economic street at the moment.
-- from the news services