Amazon.com Inc said on Thursday that its second-quarter net income jumped, bolstered by shoppers who spent more with the online retailer even as consumer confidence fell overall.
However, the Seattle-based company’s earnings fell below analyst expectations, and its stock dove in after-hours trading.
For the April-June quarter, Amazon.com earned US$207 million, or US$0.45 per share.
That represents a 45 percent increase from US$142 million, or US$0.32 per share, in the same quarter last year.
Analysts polled by Thomson Reuters were looking for US$0.54 per share, but rising operating expenses cut into Amazon’s profit growth.
Overall, operating expenses grew 40 percent to US$6.3 billion. Part of that resulted from rising fulfillment costs — US$582 million, compared with US$409 million last year.
The company’s cost of sales, which naturally rises along with revenue, also grew.
In a conference call with journalists to discuss the company’s results, chief financial officer Tom Szkutak attributed much of the expense growth to Amazon’s efforts at increasing its ability to fill orders.
He said the company is adding 13 fulfillment centers this year and has hired 2,200 people during the quarter.
Revenue grew 41 percent to US$6.6 billion, slightly beating analyst predictions for US$6.5 billion in revenue.
The growth came mainly from sales of electronics and other general merchandise, which increased 69 percent from last year to US$3.5 billion.
Revenue from books, CDs, DVDs and other media rose 18 percent to US$2.9 billion.
Revenue increased 46 percent in North America to US$3.6 billion, and 35 percent to US$3 billion elsewhere.
As usual, Amazon did not provide details about sales of its Kindle e-reader, which was joined in the second quarter by a formidable competitor, Apple Inc’s iPad. In a statement, CEO Jeff Bezos said Amazon is seeing “rapid growth” in Kindle sales, among other company offerings.
Earlier this week, Amazon did say that Kindle sales have risen since it cut its price last month.
To push more Kindle sales, Amazon dropped the price of the Kindle by US$70, to US$189, just hours after Barnes & Noble Inc said it would lower the price of its competing Nook e-reader by US$60, to US$199.
Amazon also started selling the Kindle at Target stores.
Bezos also said on Thursday that in the past year, consumers have bought more than US$1 billion worth of goods from Amazon with a mobile device. This includes digital purchases made over the Kindle, which can download content wirelessly.
ThinkEquity analyst Aaron Kessler called the company’s quarter was solid overall, despite its inability to meet bottom-line expectations.
In the current quarter, Amazon believes revenue will total US$6.9 billion to US$7.6 billion, which would mark growth of 27 percent to 40 percent over the third quarter of last year. Analysts expect US$7.1 billion in revenue.
DEFENDING DEMOCRACY: Taiwan shares the same values as those that fought in WWII, and nations must unite to halt the expansion of a new authoritarian bloc, Lai said The government yesterday held a commemoration ceremony for Victory in Europe (V-E) Day, joining the rest of the world for the first time to mark the anniversary of the end of World War II in Europe. Taiwan honoring V-E Day signifies “our growing connections with the international community,” President William Lai (賴清德) said at a reception in Taipei on the 80th anniversary of V-E Day. One of the major lessons of World War II is that “authoritarianism and aggression lead only to slaughter, tragedy and greater inequality,” Lai said. Even more importantly, the war also taught people that “those who cherish peace cannot
STEADFAST FRIEND: The bills encourage increased Taiwan-US engagement and address China’s distortion of UN Resolution 2758 to isolate Taiwan internationally The Presidential Office yesterday thanked the US House of Representatives for unanimously passing two Taiwan-related bills highlighting its solid support for Taiwan’s democracy and global participation, and for deepening bilateral relations. One of the bills, the Taiwan Assurance Implementation Act, requires the US Department of State to periodically review its guidelines for engagement with Taiwan, and report to the US Congress on the guidelines and plans to lift self-imposed limitations on US-Taiwan engagement. The other bill is the Taiwan International Solidarity Act, which clarifies that UN Resolution 2758 does not address the issue of the representation of Taiwan or its people in
US Indo-Pacific Commander Admiral Samuel Paparo on Friday expressed concern over the rate at which China is diversifying its military exercises, the Financial Times (FT) reported on Saturday. “The rates of change on the depth and breadth of their exercises is the one non-linear effect that I’ve seen in the last year that wakes me up at night or keeps me up at night,” Paparo was quoted by FT as saying while attending the annual Sedona Forum at the McCain Institute in Arizona. Paparo also expressed concern over the speed with which China was expanding its military. While the US
‘FALLACY’: Xi’s assertions that Taiwan was given to the PRC after WWII confused right and wrong, and were contrary to the facts, the Ministry of Foreign Affairs said The Ministry of Foreign Affairs yesterday called Chinese President Xi Jinping’s (習近平) claim that China historically has sovereignty over Taiwan “deceptive” and “contrary to the facts.” In an article published on Wednesday in the Russian state-run Rossiyskaya Gazeta, Xi said that this year not only marks 80 years since the end of World War II and the founding of the UN, but also “Taiwan’s restoration to China.” “A series of instruments with legal effect under international law, including the Cairo Declaration and the Potsdam Declaration have affirmed China’s sovereignty over Taiwan,” Xi wrote. “The historical and legal fact” of these documents, as well
RSS