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Sat, Jul 25, 2009 - Page 10 News List

Amazon’s quarterly profits fell 10%, but sales up 14%

AFP , NEW YORK

Amazon posted a 10 percent drop in quarterly net profit on Thursday, a day after the US online retail giant announced it was buying Internet shoe store Zappos.com in the biggest purchase in its history.

Amazon said in a statement that net profit fell to US$142 million in the second quarter, or US$0.32 per share, from US$158 million, or US$0.37 per share, a year ago.

Amazon said net sales rose 14 percent during the quarter to US$4.65 billion, slightly less than the US$4.69 billion forecast by analysts.

“We’re staying heads down focused on providing customers low prices, vast selection, and fast delivery,” Amazon founder and chief executive Jeff Bezos said.

The Seattle-based Amazon said operating income decreased 27 percent to US$159 million in the second quarter.

It said the unfavorable impact from changes in foreign exchange rates on operating income was US$30 million. A US$51 million settlement with Toysrus.com also had an impact on operating income in the quarter.

The company noted that operating income for the second quarter of last year included a US$53 million non-cash gain from the sale of its European DVD rental assets.

Amazon said it expected net sales of between US$4.75 billion and US$5.25 billion in the third quarter, an increase of between 11 percent and 23 percent over the same period last year.

It said operating income was expected to range from US$120 million and US$210 million.

The forecast does not take into account Amazon’s purchase of Zappos.com for US$847 million.

During the second quarter, Amazon launched a new version of its popular electronic book reader, the Kindle, and cut the price of its original Kindle model to US$299.

Sales of electronics and other general merchandise grew 35 percent to US$2.07 billion in the second quarter while media sales grew 1 percent to US$2.44 billion.

Amazon said North American sales accounted for US$2.45 billion, up 13 percent over the same quarter last year, while international sales totaled US$2.20 billion, up 16 percent.

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