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Wednesday, October 22, 2008

Amazon's Net Jumps 48%; Full-Year Guidance Lowered

Kathryn Glass

FOXBusiness

Amazon (AMZN) reported strong sales and profit in the third quarter, but cut its full-year outlook, sending shares lower on Wednesday after the closing bell.

The company announced a 48% jump in net income to $118 million in the third quarter, or 27 cents per share, compared to $80 million in net income or 19 cents per share for the year-ago period.

Revenue increased 31% to $4.26 billion. Analysts were expecting earnings of third-quarter income of 25 cents per share on $4.27 billion in revenue, according to a poll by Thomson Reuters.

Amazon said its sales growth was driven by lower prices, improved selection and free shipping incentives.

The company also touted its increased offerings for the Kindle, its portable, electronic reading machine, saying that titles available for the device already make up more than 10% of unit sales for digital and print formatted books.

Amazon lowered its outlook for the year, however, announcing it expects revenue between $18.46 billion and $19.46 billion for 2008. Analysts had predicted revenue of $19.49 billion for 2008.

This sent shares of Amazon plunging 15% in after-hours trading, on fears that weak holiday sales could hurt the company.