Amazon.com Sees Increased Second Quarter Revenue, Profits Drop

By Ed Silverstein July 27, 2011

Second quarter profits at Amazon.com dropped even though the company saw a hefty 51 percent hike in revenue.

The Associated Press explained that Amazon spent money during the quarter for expansion.

Amazon is building 15 new order-filling centers, according to The AP. Operating expenses increased 54 percent during the quarter to $9.71 billion, The AP adds. Amazon.com earned $191 million, or 41 cents per share, compared to $207 million, or 45 cents per share, for the same quarter in 2010, The AP said.

Revenue rose to $9.91 billion from $6.57 billion last year – with sales of electronics and general merchandise, as well as books, CDs, DVDs and other media each seeing increases, The AP adds.

“Low prices, expanding selection, fast delivery and innovation are driving the fastest growth we've seen in over a decade,” Jeff Bezos, CEO of Amazon.com, said in a company press release. “Kindle 3G with Special Offers has quickly become our bestselling Kindle at only $139. Customers love the convenience of a 3G reader – no hunting for or paying for Wi-Fi hotspots. Amazon picks up the tab for the 3G wireless, so you have no monthly payments or annual contracts.”

The company also noted that it launched MyHabit.com, a fashion service, which offers up to 60 percent off list prices of designer and boutique brands in women's, men's and children's furnishings.

Also, CBS and Amazon.com have reached a deal for a non-exclusive licensing agreement that will let Amazon customers stream TV shows from CBS, according to TechZone360.

In a related matter, Amazon.com reports it is projecting during the third quarter its net sales will be between $10.3 billion and $11.1 billion, an increase of between 36 percent and 47 percent when compared to the third quarter 2010.

In addition, the company’s operating income is expected to be between $20 million and $170 million, or “between 93 percent decline and 37 percent decline compared with third quarter 2010,” the company said in its statement.

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Ed Silverstein is a TechZone360 contributor. To read more of his articles, please visit his columnist page.

Edited by Jennifer Russell

TechZone360 Contributor

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