Amazon.com, the world's largest internet retailer, reported profit that topped analysts' estimates after discounts and the Kindle fueled sales. The shares jumped 15 per cent in late trading.
Third-quarter net income increased 69 per cent to $US199 million ($215 million), or 45 cents a share, from a year earlier, the Seattle-based company said in a statement. Analysts had predicted 33 cents, according to a Bloomberg survey. Sales rose 28 per cent to $US5.45 billion.
Chief Executive Officer Jeff Bezos has attracted customers by expanding overseas, offering shipping promotions and introducing new versions of the Kindle electronic reader. Amazon.com also announced four acquisitions this year, including the online shoe seller Zappos.com Inc., to broaden its reach.
``This level of outperformance was unexpected,'' said Sandeep Aggarwal, an analyst at Collins Stewart LLC in San Francisco. He rates the shares hold and doesn't own any. ``They are doing everything right.''
Amazon.com rose $US13.80 to $US107.25 in extended trading after closing at $US93.45 on the Nasdaq Stock Market. The shares have climbed 82 per cent this year.
Sales in the fourth quarter will rise to between $US8.13 billion and $US9.13 billion, Amazon.com said. That compares with the $US8.19 billion predicted by analysts. Operating income will be $US300 million to $US425 million in the period, the company said.
Third-quarter net income rose from $US118 million, or 27 cents a share, a year earlier.
New Kindle
This month, Amazon.com unveiled an international version of its $US259 Kindle. The company also is trying to get its e-books onto more devices. Today, Amazon.com introduced a program that lets consumers read Kindle books on personal computers.
The books also are available through an application on Apple Inc.'s iPhone. Amazon.com's Whispersync technology lets readers continue reading on the same page they left off when they switch between the Kindle, the iPhone or a PC.
``Kindle has become the No. 1 best-selling item by both unit sales and dollars -- not just in our electronics store but across all product categories on Amazon.com,'' Bezos said in the statement.
Amazon.com has about 60 per cent of the e-reader market in the US, according to Forrester Research Inc. Sony Corp.'s e- reader ranks second with 35 per cent. Barnes & Noble Inc., the largest US bookstore chain, introduced a device this week that competes with the Kindle.
Sales gain
The Kindle will bring in about $US1.9 billion in annual revenue in 2012, up from $US300 million this year, Aggarwal said. Amazon.com doesn't disclose Kindle sales.
``You should see more expansion in the categories we're in, as well as more geographical expansion over time,'' Chief Financial Officer Tom Szkutak said on a conference call.
Amazon.com has stepped up competition with Wal-Mart Stores Inc., the world's largest retailer. Over the past decade, Amazon.com has grown from an online bookstore to a seller of general merchandise, including everything from motorcycle accessories to groceries. It also markets its own line of furniture and electronics.
After Walmart cut the price of books by best-selling authors to $US9 in the past week, Amazon.com matched the offer. Target Corp., the second-largest US retailer, followed with a similar price cut.
About 30 per cent of Amazon.com's sales come from third- party merchants who sell on the site. That puts the company in competition with EBay Inc., the most-visited US online marketplace.
EBay gave a fourth-quarter profit forecast yesterday that missed some analysts' estimates, sending the stock down today. EBay is building up its PayPal and Bill Me Later payment services, which carry lower profit margins than other parts of the business.
