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Amazon.com: Earnings Up, Shares Down

7/23/2010 12:14:57 PM Eastern

Seattle - Shares of Amazon.com fell to a nine-month low yesterday after its second-quarter earnings came in below analysts' estimates.

Profits grew 45 percent to $207 million for the three months ended June 30, but were limited by higher spending on Kindle marketing, cloud computing and additional distribution centers.

Net sales increased 41 percent to $6.6 billion in the second quarter, including the unfavorable impact of currency exchange rates.

In North America, which comprises 55 percent of all Amazon sales, CE and other general merchandise revenue rose 76 percent to $2 billion, while media sales rose 15 percent to $2.9 billion.

In a statement, founder/CEO Jeff Bezos said the e-tailer is enjoying rapid growth in m-commerce, Kindle and third-party sales. "In the last twelve months, customers around the world have ordered more than $1 billion of products from Amazon using a mobile device," he noted. "The leading mobile commerce device today is the smartphone, but we're excited by the potential of the new category of wireless tablet computers. Over time, tablet computers could become a meaningful additional driver for our business."

The company said earlier this week that Kindle e-books have been outselling hardcover books by a ratio of 143 to 100 for the past three months, fueled in part by the e-book reader's lower $189 price point.

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