July 27, 2011

Amazon outpaces earnings expectations

SAN FRANCISCO - Amazon.com Inc.'s second-quarter profit fell as the leading online retailer continued to spend on expanding its business.

At the same time, higher merchandise sales lifted revenue 51 percent. Both results, issued late Tuesday, easily beat analyst expectations, as did Amazon's third-quarter sales outlook. Amazon shares rose 6 percent in after-hours trading.

For the quarter that ended June 30, revenue rose to $9.91 billion from $6.57 billion last year. The company's electronics and general-merchandise revenue rose 69 percent, to $5.89 billion, while sales of books, CDs, DVDs and other media rose 27 percent, to $3.66 billion.

Amazon CEO Jeff Bezos said in a statement that "low prices, expanding selection and innovation" drove the company's second-quarter growth.

That growth means Amazon must keep investing in operation expansions and upgrades. So far this year, in order to support the proliferation of its online-retail business, it has announced it is building 15 new centers, including one in Phoenix, to fill orders. Overall, operating expenses rose 54 percent, to $9.71 billion.

For the quarter that ended June 30, Seattle-based Amazon said it earned $191 million, or 41 cents per share, compared with $207 million, or 45 cents per share, in the year-earlier quarter. For the current quarter, Amazon forecast revenue of $10.3 billion to $11.1 billion, the top of which is well above the $10.4 billion that analysts expect.

Bezos said the $139 Kindle 3G with Special Offers - a version of the Kindle released during the quarter that is subsidized with ads - is now its top-selling Kindle device.

Associated Press Jul. 27, 2011 12:00 AM

Amazon outpaces earnings expectations

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