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Amazon CE Segment Sales Rise 27%

2/03/2005 09:53:00 AM Eastern

Seattle — A thriving Thanksgiving weekend business resulted in a first for Amazon.com, U.S. sales of consumer electronics exceeded book sales during this holiday period.

CE products, which are part of Amazon’s electronics and other general merchandise business segment, helped increase Amazon’s total North American electronics segment sales 27 percent in the three months that included Thanksgiving, hitting $448.9 million, up from $352.5 million in the year-ago period.

Fourth-quarter sales in Amazon’s North American media segment, which includes DVD/video and video games products, increased 18 percent, reaching $885.4 million from a year-on-year $750.9 million.

Overall gross profit for Amazon’s North American sales rose 23 percent in the fourth quarter, ended Dec. 31, hitting $355 million, compared with $289 million in the same three months the previous year.

For the 12 months, North American CE segment sales moved up 28 percent to $1.1 billion from $878.5 million in 2003, while 12-month media segment sales increased 14 percent to $2.6 billion from $2.3 billion.

Amazon’s consolidated electronics segment sales grew 53 percent in the 12 months, to $1.7 billion from $1.1 billion, and represented 24 percent of worldwide sales. In the fourth quarter, consolidated electronics segment sales rose 45 percent, to $685.8 million, from a year-ago $473.4 million.

Consolidated Amazon sales in the fourth quarter jumped 31 percent to $2.5 billion from $1.9 billion in the same three months in 2003. The revenue gain was helped by $85 million in favorable currency rates. Net income hit $346.7 million, up from $73.2 million. However, the retailer benefited from a $244 million one-time tax gain. At the same time the weak dollar boosted holiday sales, free-shipping costs and discounts eroded profit and cut margin.

For the 12 months, consolidated sales climbed to $6.9 billion from $5.3 billion, including a $276 million benefit from foreign exchange. Net income soared to $588 million from $35.3 million, but included the $244 million tax benefit.

Another first-ever for Amazon is the announcement the retailer is introducing Amazon Prime, an “all-you-can-eat” program where members get unlimited express two-day shipping, with no minimum purchase, when they pay a flat per-year fee of $79.