Amazon Q3 sales, profit surge |
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Amazon.com reported strong growth in third-quarter sales and profit, a sign that the online retail giant continues to attract shoppers in the tough economy.
The company's sales jumped 28 percent from year-ago quarter, to $5.45 billion. Net income soared 68% to $199 million, or 45 cents per diluted share. The Q3 results beat analyst expectations.
Amazon's stock was up more than 14 percent in after-hours trading to $107.40.
North America media sales, a key segment for Amazon which encompasses, books, music, and video games, was up 13 percent to $1.41 billion. Globally, media sales were up 17 percent to $2.92 billion.
"That was a pretty impressive rebound there," said Dan Geiman, an analyst covering Amazon at Seattle brokerage McAdams, Wright Ragen.
Geiman said the release of several popular video games during the quarter, including “The Beatles: Rock Band” and “Guitar Hero 5,” as well as Dan Brown's new thriller, "The Lost Symbol," contributed to the media sales growth.
North America and global media sales had been essentially flat in the second quarter, partly due to soft video game sales.
Another key segment, electronics and other general merchandise, was up 36% to $1.29 billion in North America and up 44% to $2.36 billion globally. Amazon has been steadily adding products to its websites and now sells a much broader range of merchandise than it did in its early years.
Amazon CEO Jeff Bezos, in a statement, said the company's Kindle electronic reader "has become the #1 bestselling item by both unit sales and dollars – not just in our electronics store but across all product categories."
As usual, however, Amazon did not specify Kindle sales volume or the number of units sold. Amazon made a flurry of Kindle-related announcements today, including making Kindle content available on Windows PCs and lowering the price of its new international Kindle.
Amazon's Q3 results handily beat analyst estimates. Analysts polled by Thomson Reuters had expected $5.03 billion in revenue and earnings of 33 cents per share.
International sales from the company's U.K., German, Japanese, French and Chinese websites, increased 33 percent to $2.61 billion. Amazon CFO Tom Szkutak, in a conference call, said, "We will launch new geographies over time," though he did not elaborate.
The online retail giant signaled it sees a big holiday season this year. The company said it expects Q4 sales of between $8.125 billion and $9.125 billion, representing growth of between 21% and 36% (that excludes the impact of Amazon's acquisition of Zappos.com, expected to close in the fourth quarter).
Amazon's rivals are boosting their efforts for the holidays. Wal-Mart, Amazon and Target have been slashing online prices on top-selling books — a signal perhaps of bigger ecommerce battles to come.
A couple other interesting tidbits: Amazon said its U.K. website started offering free shipping on all products (eliminating a £5 threshold). Amazon's Japan site now offers free same-day delivery service to Amazon Prime customers in two regions of the country.
Amazon just launched same-day delivery service (for a fee) in Seattle and six other U.S. cities.
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