Amazon delivers strong Q3; shares skyrocket after hours
Amazon easily beat Wall Street's estimates for its third quarter, reporting a net income of $199 million, or 45 cents per share, on sales of $5.45 billion, a 28 percent jump from the year-ago quarter. Analysts had been expecting earnings of 33 cents on sales of $5.03 billion. (Statement)
Shares of Amazon immediately jumped, up more than 10 percent in after-hours trading. The company, in its release, was bullish on Kindle, the company's e-reader device. In a statement, CEO Jeff Bezos said:
Kindle has become the #1 bestselling item by both unit sales and dollars – not just in our electronics store but across all product categories on Amazon.com. It’s also the most wished for and the most gifted. We are grateful for and energized by this customer response. Earlier this week we began shipping the latest generation Kindle. Its 3G wireless works in the U.S. and 100 countries, and we’ve just lowered its price to $259.
Still, Amazon - increasingly referred to as the "Wal-Mart of the Web" - is a company in transition. Some of its core physical products - such as books and music - are increasingly moving into a digital world and Amazon continues to adjust. Its Kindle book reader, which has seen price drops, has become synonymous with e-readers, even as competitors surface.
In a call with analysts today, executives used a few key talking points to answer questions about its success, its outlook for Q4 and its competitive landscape - beefed-up inventory, lower prices and great customer service, but not much specific detail beyond that.
In addition, the company was asked what threshold it might have to cross before it starts sharing specific sales numbers on Kindle. The answer, which really wasn't much of an answer, said that when something gets to a certain size, it makes sense to break out the numbers by countries. And then it was time for the next question. That's really not much of an answer to the question that analysts - and tech bloggers - have long been asking: How are sales of Kindle doing?
Shares of Amazon were flat for the day, closing at $93.45 in regular trading. In after-hours trading, shares jumped more than 10 percent and were on the rise.