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Amazon shares soar on report

Fri., Oct. 23, 2009

Earnings rose 62 percent in Q3

SAN FRANCISCO – Inc. said Thursday that its third-quarter earnings soared 62 percent, showing that consumers are comfortable opening their wallets to the online retailer despite the still-shaky economy.

The report and Amazon’s prediction for more than 20 percent growth in the current quarter sent Amazon shares surging in after-hours trading.

Throughout the recession, shoppers have flocked to Amazon for deals on all kinds of products, from books to baby strollers, even while offline competitors were struggling.

The most recent report shows that the summer months were no exception – and that Amazon expects to carry the momentum through the holidays. It said it expects revenue in the current quarter to grow between 21 percent and 36 percent.

During a conference call with reporters, Chief Financial Officer Tom Szkutak said consumers are continuing to spend at Amazon because of its low prices and large selection.

“That’s certainly helping growth,” he said.

Amazon ended the quarter with more than 98 million active customer accounts, up 17 percent from a year ago.

Szkutak said that Amazon’s earnings rose so much more than its revenue in part because the company was able to keep its operating expenses in check.

Amazon said Thursday it earned $199 million, or 45 cents per share, in the third quarter. That far exceeded the 30 cents per share that analysts polled by Thomson Reuters were expecting.

Revenue climbed 28 percent to $5.45 billion, also surpassing analyst estimates of $5.03 billion.

Amazon’s stock jumped $13.70, or 14.7 percent, to $107.25 in after-hours trading, well past its 52-week high of $97.82.

Before the earnings report the stock had finished regular trading up 3 cents at $93.45.

Tags: Amazon

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