Amazon.com has beaten Wall Street expectations for quarterly earnings and revenue as lowered prices lured more shoppers online and sales of its Kindle electronic reader gained momentum.
Shares in the global online retailer, which sells everything from car parts to comic books, rose 2.3 per cent in after-hours trade despite a weak second-quarter profit view.
The company increased revenue an unexpectedly strong 18 per cent as cash-strapped consumers went shopping online and Amazon's own discount shipping program spurred purchases.
Chief executive Jeff Bezos said sales of the company's Kindle device had "exceeded our most optimistic expectations."
The Kindle, sales of which are not disclosed, has garnered out-sized attention but analysts cannot speculate to what extent the $359 device contributes to profit, if at all.
Mr Bezos also said shoppers enrolled in the Amazon Prime discount shipping program were boosting growth, as they were picking up goods across multiple categories.
Amazon's first-quarter net income rose 24 per cent to $177 million, or 41 cents per share, from $143 million, or 34 cents per share, a year earlier. Analysts, on average, had been expecting earnings of 31 cents a share, according to Reuters Estimates.
Revenue rose 18 per cent to $4.89 billion, but excluding the negative impact of a stronger dollar, sales rose 25 per cent. Wall Street had been expecting sales of $4.75 billion.
Once criticized for spending on technology investments and putting sales ahead of profits, Amazon is now praised by Wall Street analysts who laud its ability to attract consumers in the midst of a recession.
Besides lowering prices, the company has widened its selection, and the recent closures of retailers like Circuit City have only helped the online giant's sales.
But a run-up in its stock -- up 57 per cent since January -- has made its valuation soar, scaring off potential investors. Amazon is now valued at 53 times projected 2009 earnings, compared to the 16.5 of the Standard & Poor's Retailing Index, a valuation many analysts deem overly rich.
International sales in the quarter rose 15 per cent, but on a currency neutral basis that figure was 28 per cent.
Amazon also credited inventory management and growth in independent sellers who use the site as their marketplace as reasons for a boost in gross margin, which was offset by lower prices. Amazon gets an undisclosed cut of what is sold.
Mr Bezos said a 300 per cent increase in items sold by these independent sellers but shipped by Amazon under its fulfillment program was due to Amazon Prime. If sellers work with Amazon's fulfillment program, their goods are eligible for the shipping discount, thereby driving sales, he said.
Amazon said it expects second-quarter revenue of $4.3 billion to $4.75 billion, or a gain of between 6 per cent and 17 per cent. Operating profit is expected to range from $110 million to $190 million, a decline of between 12 pe rcent and 49 per cent. In the year-ago second quarter, results were boosted by a one-time gain.
Wall Street has been expecting operating income of $178.5 million, above the mid-point of Amazon's guidance.
Amazon's shares rose 2.3 per cent in extended trade to $82.50 after closing at $80.61, up nearly 2 per cent, on Nasdaq.
Reuters