Amazon Earnings Rise 16% as Electronics Sales Surge
Oct 21st 2010 5:09PM
Updated Oct 22nd 2010 6:37AM
Amazon's (AMZN) third-quarter profits rose 16% thanks to surge in sales of electronic products such as its Kindle e-reader, the world's largest online retailer reported after the closing bell Thursday.
Net income was $231 million, or 51 cents a share, up from $199 million, or 45 cents, a year earlier, the company said in its earnings statement. Revenue jumped 39% to $7.56 billion.
Amazon leads an online shopping market whose growth has forced brick-and-mortar retailers to boost their own Web-based operations. The trend has caused a number of retailers to turn to ShopRunner.com, a recently-launched service that offers customers two-day shipping and free returns for an unlimited number of items for a $79 annual subscription fee, which matches the annual fee for the Amazon Prime shipping service. Toys R Us, Borders (BGP) and Barnes & Noble (BKS) are among the corporate clients of ShopRunner.com, owned by closely held GSI Commerce.
Amazon's sites in August attracted 79.2 million unique visitors, up 16% from a year earlier, according to ComScore.
The company has augmented its overall online sales with items such as the Kindle, which has seen its sales enhanced as the number of e-books on the market grows: Currently, 720,000 books are available through the U.S. Kindle store. Sales of electronics and other products surged 68% from a year earlier, led by an 80% revenue jump in North America, Amazon said.
Based on analyst estimates from a Thomson Reuters survey, Amazon was expected to earn 48 cents a share on $7.35 billion in sales. The company in July forecast third-quarter sales of between $6.9 billion and $7.625 billion.
The company also said Thursday that fourth-quarter sales would be between $12 billion and $13.3 billion. Analysts are forecasting $12.3 billion in sales.
Amazon shares fell by about 4% in extended trading Thursday afternoon. Previously, the stock had risen 18% this year, compared to an 8.3% increase for the Nasdaq as a whole.