Amazon's Q1 Sales, Earnings Soar

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Seattle —’s net sales rose 18 percent to $4.9 billion and its net income increased 24 percent to $177 million during the first quarter, ended March 31.

Operating income increased 23 percent to $244 million during the period, and would have grown 39 percent excluding the unfavorable impact of currency fluctuations.

The e-commerce king attributed the strong results to demand for its Kindle e-book reader and improved inventory management.

“We’re grateful and excited that Kindle sales have exceeded our most optimistic expectations,” founder/CEO Jeff Bezos said in a statement.

Amazon’s performance surpassed projections by analysts, who also credited its expanded assortment, free-shipping offers, accelerating third-party sales, and share gains from liquidated retailers like Circuit City and Linens ’n Things.

“Amazon is navigating the challenging consumer environment well and is benefiting from consolidation in online and traditional retail,” observed William Blair analyst Jack Murphy in a research note.

Sales within the U.S. and Canada rose 21 percent to $2.6 billion, which Murphy said “stands in stark contrast to e-commerce industry sales growth, which was likely flat to down slightly in the first quarter.”

Sales within the electronics and other general merchandise category, which includes CE and IT, rose 42 percent to $1.2 billion in the U.S. and Canada, representing 45 percent of total North America segment sales.

Sales within the media category, which includes music, movies, digital downloads, software, video gaming (including consoles) and books, grew 8 percent to $1.3 billion in the North American market.

Operating income for the North America segment rose 15 percent to $150 million and gross margin was 27 percent.

During the quarter the company introduced its second-generation Kindle 2, and more recently announced an expansion of its video-on-demand service, which now offers digital downloads of more than 500 HD titles via select TiVo DVRs and Panasonic Viera Cast-enabled HDTVs, in addition to Roku players, Sony Bravia’s Internet video link and home computers.


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