SAN JOSE (dpa-AFX) - Online retailer Amazon.com Inc. (AMZN), said Tuesday its profit for the second quarter declined 8 percent from last year, as a double-digit revenue growth was more than offset by higher expenses. Nevertheless, both quarterly earnings and revenues came in well ahead of Street expectations. The company has also provided net sales outlook for the third quarter, which is indicated to come in line with current analysts' consensus.
The company posted net income of $191 million or $0.41 per share in the second quarter, down from $207 million or $0.45 per share in the prior year quarter. On average, 34 analysts polled by Thomson Reuters expected the company to report earnings of $0.35 per share for the second quarter. Analysts' estimates typically exclude special items.
Results for the quarter were positively impacted by equity-method investment activity of $15 million, including a $49 million gain on the sale of an equity position partially offset by $34 million in losses from equity-method investments.
Operating income for the quarter dropped to $201 million from $270 million in the previous year quarter. The result included $28 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter.
Second quarter net sales increased 51 percent to $9.91 billion from $6.57 billion in the second quarter of 2010. Thirty-three analysts had a consensus revenue estimate of $9.37 billion for the quarter.
Excluding the $477 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales would have grown 44 percent over last year.
North America segment sales, representing the company's U.S. and Canadian sites, were up 51 percent to $5.41 billion from the second quarter 2010.
International segment sales, representing the company's U.K., German, Japanese, French, Chinese and Italian sites, soared 51 percent to $4.51 billion. Excluding the favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 36 percent.
Worldwide Media sales grew 27 percent to $3.66 billion. Excluding the favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 20 percent.
Worldwide Electronics and Other General Merchandise sales increased 69 percent to $5.89 billion. Excluding the foreign exchange translation in the quarter, sales grew 62 percent.
Total operating expenses for the second quarter increased to $9.71 billion from $6.30 billion in the prior year quarter.
During the quarter, Amazon.com launched Kindle Textbook Rental, offering students savings of up to 80 percent off textbook list prices.
Amazon.com noted that the U.S. Kindle Store now has more than 950,000 books, including New Releases and 110 of 111 New York Times Bestsellers. Over 800,000 of these books are $9.99 or less, including 65 New York Times Bestsellers. Millions of free, out-of-copyright, pre-1923 books are also available to read on Kindle.
For the third quarter, the company anticipates net sales of $10.3 billion to $11.1 billion, representing a growth of 36 percent to 47 percent over last year. Analysts project net sales of $10.35 billion for the third quarter.
Operating income is expected between $20 million and $170 million for the third quarter.
Amazon.com closed Tuesday's regular trading at $214.18, up 69 cents on a volume of 9.61 million shares. In after-hours, the share further gained $12.36 or 5.77%.
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