Amazon shares leap 16 per cent
28 July 2005
Online retailer Amazon.com has reported the biggest increase in second-quarter revenue in over three years.
The group saw share prices jump 16 per cent after it announced the better-than-expected figures for the three months to June 30th. The company's shares had slipped 15 per cent over the year to date, after investors became concerned about levels of revenue growth and spending on improvements and shipping programs.
The Seattle-based internet retailer reported sales of $1.75 billion for the quarter, while gross profit as a percentage of sales over the period widened to 25.7 per cent, the highest rate in three years. Sales by other merchants accounted for 28 per cent of units sold in the quarter, up 24 per cent on a year earlier.
Amazon, which celebrated its 10th anniversary this month, said in a statement that international sales growth, excluding foreign exchange, rose in the second quarter of 2005. Income tax costs rose to $56 million, from $5 million the year before, as the company lost $233 million of tax benefits it had last year.
Amazon chief financial officer Thomas Szkutak attributed the strong profits to increasing credit card and web services sales.
The company now predicts that third-quarter revenue will rise by as much as 30 per cent to $1.91 billion, boosted by the mammoth sales of the sixth Harry Potter novel by children's author JK Rowling.
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