Amazon’s Sudden Decline In 2012 International Operating Income

February 15, 2013 10:46 am

We were analyzing Amazon’s Q4 2012 results – while most of the key points have been analyzed and well discussed in the tech press and among analysts, there is one number that stood out: Operating Income for the International Segment.

The segment operating income for North America is $1.592 billion on sales of $34.813 billion for the twelve months ending Dec 2012. That is an operating income margin of 4.57 percent. Whereas for the International segment, for the same time period, the segment operating income is just $76 million on sales of $26.28 billion – a margin of just 0.29 percent. As a comparison, the International segment seemed to have done well comparatively last year – $640 million operating income on sales of $21.372 billion – a margin of almost 3 percent.

What happened to Amazon’s International segment in 2012? Why did the margins come down to 0.29 percent in 2012 from 3 percent in 2011?

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