Analyst Estimates That Kindle Fire Sales Reached 6 Million in the Fourth Quarter
According to recent revised expectations, and in spite of some mixed reviews from technology and retail pundits, it seems that the Amazon (NASDAQ:AMZN) Kindle Fire may have caught fire in the burgeoning tablet marketplace. Jordan Rohan, an analyst with Stifel Nicolas, has raised his group’s estimate of Kindle Fire sales to 6 Million off of their earlier estimate of 5 million. Rohan based the increased estimate on new sales research. Rohan also lifted his revenue estimate to $67.2 billion, an increase of $2.34 billion, with an EPS of $2.27. Wall Street consensus sits presently at around $65.3 billion with an EPS of $1.88. Rohan’s first quarter expectations are between $12.4 to $13.6 billion.
“We believe most investors have overlooked the potential upside of the sales of media (books and video) to be played on the new Kindle devices,” says Rohan. The Kindle and Kindle Fire are currently produced at a loss to keep prices competitive with the expectation that the loss will be worth it based on future media sales for the devices, with has concerned many when making their expectations about the stock.
“We believe that software attach rates correlate inversely with the hardware price,” said Rohan, who added, “From a cost perspective, the shift to digital delivery of content could help Amazon avoid costly free shipping subsidies. Hence, we believe there is a great deal more to the Kindle device strategy than most have discounted.”
Amazon (NASDAQ:AMZN) announces its quarterly results on Tuesday.