Amazon Beats Wall Street Estimates For 3Q
Boosted by healthier ecommerce and the popularity of its Kindle e-reader, Amazon on Thursday beat Wall Street estimates for the third quarter of the year.
Year-over-year, sales were up 39% in the quarter to $7.6 billion, while net income was up 16% to $231 million.
Meanwhile, operating income increased 7% to $268 million in the third quarter, compared with $251 million in third quarter of 2009.
Rather than dwell on the company's strong showing, Amazon CEO Jeff Bezos appeared to be focused on the quarter ahead. "This holiday season we'll have the best prices, the biggest selection, the highest in-stock, and the fastest delivery in our history," he said Thursday.
In the fourth quarter, net sales are expected to be between $12 billion and $13.3 billion, growing between 26% and 40% compared with fourth-quarter 2009.
Operating income is expected to be between $360 million and $560 million, or between a 24% decline and 18% growth compared with fourth quarter 2009.
And Bezos isn't the only one who expressed confidence in Amazon's prospects for the fourth quarter.
Bank of America/Merrill Lynch analyst Justin Post said he has "more confidence in fourth-quarter upside" for the ecommerce giant. "While expectations are high into the print, we think strong holiday sales data points will drive the stock higher," Post wrote in a note to clients.
Faced with mounting pressure from Apple, Amazon has bet its success on new markets and ubiquitous device compatibility -- strategies that so far seem to be working.
In the third quarter, North America segment sales -- representing the company's U.S. and Canadian sites -- were $4.13 billion, up 45% year-over-year.
International segment sales representing the company's U.K., German, Japanese, French and Chinese sites were $3.43 billion -- up 32% year-over-year, while worldwide media sales grew 14% to $3.35 billion.
Looking beyond ecommerce, Amazon is reportedly developing a subscription service to deliver TV shows and movies directly to consumers. As The Wall Street Journal reported last month, such a service would compete directly with rival offerings from Apple, Netflix, and Google.