Amazon posted quarterly net profit last night that more than tripled, surprising Wall Street as US sales jumped and the company raised its 2007 sales and operating earnings outlook, sending shares up more than 20 per cent.
"It's an amazing performance," said Bernstein Research analyst Jeffrey Lindsay. "A lot of it (growth) seems to have come in the United States, which is particularly surprising since that's considered Amazon's most mature market."
Profit margins widened in a good sign for investors concerned that the Web retailer in recent years has focused on sales growth at the expense of earnings.
Amazon shares already had surged 55 per cent since first-quarter earnings in April showed improved profit margins and pared-back spending. The stock has more than doubled in the last year.
Net income in the second quarter rose to $78 million, or 19 cents per share, compared with $22 million, or 5 cents a share, a year earlier. Revenue rose 35 per cent to $2.89 billion in the second quarter while North American net sales rose 38 per cent, representing the highest growth in six years for that region.
Earnings of 19 cents per share topped the Wall Street target of 16 cents, while revenue also beat the $2.8 billion average expectation, according to Reuters Estimates.
Chief Financial Officer Tom Szkutak attributed part of the US sales growth to Amazon Prime, a discount shipping program that charges $79 annually for unlimited two-day shipping.