Seattle — Sales in the North American electronics and other general merchandise business at Amazon.com jumped 33 percent in the third quarter, climbing to $304 million, from $228 million in the year-ago period. This business includes consumer electronics, office products and cameras.
The online retailer enjoyed a 21 percent gain in its North American media business during the third quarter, with sales increasing to $684 million from a year-earlier $564 million. This business includes DVD/video sales, software, video games, video game consoles and DVD rental.
Consolidated electronics and other general merchandise sales in the three months, ended Sept. 30, rose 43 percent, reaching $491 million worldwide, up from $344 million in the same period in 2004.
Amazon sales in North America climbed 28 percent in the third quarter, hitting $1 billion, compared with $816 million year-on-year. Operating income in North America rose to $66 million, from $57 million in the same three months last year, a 16 percent gain.
Consolidated Amazon sales increased 27 percent in the third quarter, to $1.9 billion, up from a year-ago $1.5 billion.
However, Amazon’s earnings did not reach past growth returns, due mainly to the company’s continued maintenance of its low-pricing policy and discounted shipping in order to increase sales, and its adherence to razor-thin margins.
“For $79 a year, Amazon Prime members get ‘all-you-can-eat’ free express shipping,” said Jeff Bezos, founder/CEO, in defense of his company’s free two-day shipping membership program started this past February.
At the same time, Amazon settled a patent lawsuit, which included a one-time $40 million payment in the third quarter.
Consolidated operating income for the three months decreased 32 percent to $55 million, down from $81 million year-on-year. Excluding the negative impact of the $40 million payout, operating income would have increased 17 percent to $95 million, said Amazon.
Consolidated net income decreased 44 percent to $30 million, from $54 million a year ago. The current third-quarter figure includes $21 million in income tax expense, compared with $3 million in the same three months the prior year. Excluding the $40 million settlement, net income in the third quarter would have been $50 million, said the company.
For the nine months, CE division sales in North America climbed 27 percent, reaching $863 million from a year-ago $679 million.
Consolidated CE sales for the nine months soared 43 percent, hitting $1.4 billion, up from $1 billion.
The company’s media business for the nine months was up 18 percent to $2 billion, from $1.7 billion year-on-year. Consolidated media sales in the nine months increased 19 percent to $3.9 billion, from $3.3 billion in the same period in 2004.
Consolidated Amazon sales for the nine months came in at $5.5 billion, from $4.4 billion in the same time frame the previous year, while nine-month consolidated net income dropped to $160 million from a year-earlier $242 million.