Amazon Q2 profit up 45% but misses Wall Street forecast |
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Amazon.com reported sharp growth in second quarter profit, but the result missed Wall Street's forecast and the company's shares fell more than 15 percent in after-hours trading.
The e-commerce giant reported Q2 net income of $207 million, or 45 cents per diluted share. That's up 45 percent from $142 million, or 32 cents per share, the same quarter a year ago. Analysts, however, had been expecting Q2 net income of 54 cents a share.
One interesting factoid from the press release: Amazon said its sales via mobile device had surpassed $1 billion in the last year.
Amazon's operating expenses increased 40 percent to $6.3 billion in the second quarter as the company boosted its infrastructure capacity. Amazon CFO Tom Skzutak, speaking on a conference call with analysts, said the company plans to add 13 fulfillment centers this year (though he didn't say where). Amazon uses fulfillment centers to store and ship orders for its own e-commerce operation and for many third-party businesses that sell through Amazon.
The online retail giant also continued its hiring spree, adding 2,200 full- and part-time employees in the second quarter, for a total of 28,300.
Amazon's Q2 revenue increased 41 percent to $6.57 billion, which edged passed the Wall Street forecast of $6.54 billion. Sales in the category of electronics and other general merchandise grew 69 percent to $3.49 billion worldwide, while media sales (books, CDs, DVDs) were up 18 percent to $2.87 billion.
Amazon, as usual, didn’t break out revenue for its Kindle electronic reader, which faces increasing competition from Apple's iPad and other devices. On Wednesday, Amazon touted that Kindle books now surpass hardcover titles in sales, though it didn't provide specific numbers.
Amazon gave guidance for the third quarter 2010, saying it expects net sales of between $6.9 billion and $7.625 billion, representing growth of between 27 percent and 40 percent compared with the third quarter 2009. The company expects Q3 operating income of between $210 million and $310 million, or between 16 percent decline and 24 percent growth compared with the year-ago quarter.
With mobile commerce a hot topic in the retail world, Amazon's comments on sales via mobile device were interesting. CEO Jeff Bezos, in a statement, said the company is also "excited" by the sales potential of tablet computers (presumably including iPad):
In the last twelve months, customers around the world have ordered more than $1 billion of products from Amazon using a mobile device," Amazon CEO Jeff Bezos said in a statement. "The leading mobile commerce device today is the smartphone, but we're excited by the potential of the new category of wireless tablet computers. Over time, tablet computers could become a meaningful additional driver for our business.
Update: Amazon shares are now down nearly 13 percent in after-hours trading to $104.60.
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