Amazon Posts 9% Profit Growth

By Alan Wolf -- TWICE, 2/9/2009

SEATTLE — Fourth-quarter sales at Amazon.com soared 18 percent to $6.7 billion and net income increased nearly 9 percent to $225 million for the three months ending Dec. 31.

Founder/CEO Jeff Bezos attributed the gains to the e-tailer's “low prices, great selection and free shipping offers,” which lured financially strapped shoppers during the holiday selling season.

Excluding the $320 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales would have grown 24 percent year over year, the company said.

Global sales of electronics and other general merchandise grew 31 percent to $2.9 billion during the quarter, representing 43 percent of worldwide sales compared with 39 percent last year.

Sales at the company's United States and Canadian sites rose 18 percent to $3.6 billion, the e-tailer reported, with sales of electronics and other general merchandise increasing 30 percent to $1.7 billion.

Full-year sales rose 29 percent to $19.2 billion worldwide while net income increased 36 percent to $645 million.

In contrast with the 2.5 percent decline in total e-commerce holiday sales reported by Mastercard, Amazon described the season as its “best ever,” with more than 6.3 million items ordered worldwide on its peak day of Dec. 15. Top CE sellers included Samsung's 52-inch, 1080p 120Hz LCD TV, the Apple iPod 8GB Touch and the Acer Aspire One netbook, although Bezos said the company was also “particularly grateful for the unusually strong demand for Kindle in the fourth quarter.”

The company's $359 electronic reader was out of stock for much of the year and remains on back order due to “heavy customer demand,” according to the site. A new version is expected to be introduced at a news conference today in New York.