Amazon's Q2 Sales Up, Profits Down
By Alan Wolf -- TWICE, 7/23/2009
Seattle - Amazon.com reported a 14 percent increase in net sales to $4.7 billion for its second quarter, ended June 30, while net income fell 10 percent to $142 million.
Excluding the unfavorable impact of foreign exchange rates, net sales would have grown 20 percent, the online retailer said.
Within North America, sales of electronics and other general merchandise grew 29 percent to $1.2 billion, while net sales increased 35 percent to nearly $2.2 billion.
"We're staying heads-down focused on providing customers low prices, vast selection and fast delivery," said founder/CEO Jeff Bezos, who emphasized the $900 million in savings realized by customer who participated in the company's free shipping offers.
The results came in below Wall Street's projections, causing Amazon's share price to fall in late-day trading. Analysts said the company sacrificed profits for sales growth, as aggressive pricing cut into margins, although Amazon attributed the earnings shortfall to a $51 million settlement payment to Toys "R" Us over a longstanding breech of contract suit.
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