MARKETS
Amazon records soaring profit and sales
25-07-2007
by Ciara O'Brien
Online retailer Amazon.com posted a bumper set of results for the second quarter, tripling its profit during the period.
The latest results are a far cry from the days when Amazon just about managed to break even. Profits for the quarter reached USD78 million, a 257 percent surge from the USD22 million recorded in the same period in 2006. Net sales, meanwhile, increased to USD2.89 billion, a rise of 35 percent.
Operating income soared 149 percent to USD116 million, compared with USD47 million a year earlier.
Geographically, North America and Canada continued to account for the majority of Amazon's sales, representing USD1.60 billion, while international segment sales, including the UK, Germany, Japan, France and China sites, reached USD1.28 billion.
Unsurprisingly, Harry Potter proved a major draw for Amazon customers, with more than 2.2 million advance orders received before the 21 July release date. The book was Amazon's biggest new product release during the quarter.
Meanwhile, Amazon Prime, Amazon's membership programme that was launched in 2005, helped boost results. The programme offers members unlimited free express two-day shipping with no minimum purchase requirement.
"Our strong revenue growth this quarter was fueled by low prices and the added convenience of Amazon Prime," said Jeff Bezos, founder and chief executive of Amazon.com. "More and more customers are taking advantage of Amazon Prime and we're pleased with the acceleration in subscriber growth this quarter."
In the third quarter, Amazon is predicting net sales of between USD3.0 billion and USD3.175 billion, and operating income in the range of USD75 million and USD110 million. Meanwhile, full year net sales are expected to be between USD13.80 billion and USD14.30 billion.
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