INSTANT VIEW: Amazon profit up, helped by one-time gain

NEW YORK (Reuters) - Online retailer Amazon.com Inc (AMZN.O) said on Wednesday its second quarter net profit doubled, helped by higher revenues and a gain related to the sale of European DVD rental assets.

Shares of Amazon initially rose more than 8 percent after the results, before erasing gains to trade 1.5 percent lower than their Nasdaq close of $70.54.

COMMENTARY:

JEFFREY LINDSAY, ANALYST, BERNSTEIN RESEARCH

"A large improvement in operating margin benefited from the one-time sale ... The $53 million one-time non-cash gain from the sale of the European DVD rentals business increased operating margins to 5.3 percent. Without the gain the operating margins would have been much closer to what analysts had been expecting, which was 4.0 percent."

"A lot of the incremental growth came from overseas and there was a large currency benefit incorporated into that ... and guidance is good but not as strong as this quarter."

DAN GEIMAN, ANALYST, MCADAMS WRIGHT RAGEN

"They're still doing extremely well ... If gas prices are high, customers are less likely to hop in their cars and head down to the Barnes and Noble or to a department store."

"Overall Amazon would prefer a more robust consumer environment, but to some degree there are some benefits in that consumers aren't going to drive to get to the brick and mortar store."

On Amazon's non-cash gain of $53 million from the sale of its European DVD rental assets: "You back out that one-time item and it was pretty much an in-line quarter."

MARTIN PYYKKONEN, ANALYST, GLOBAL CROWN CAPITAL

"The results were generally as expected as far as official estimates. There's a little bit of relief that at least somebody's doing well in the Internet retail sector. They seem pretty confident about the rest of the year and slightly raised full-year guidance. I didn't think they would given the macroeconomic environment, but maybe high gas prices are driving more people to shop online.

Some of that may also be Amazon actually gaining some share from eBay, when you put the two quarters together. From a margin standpoint, they are basically in line."

HAMED KHORSAND, ANALYST, BWS FINANCIAL

"The top line was about $60 million above where I was and it looks like the operating margin was a little stronger than we had been anticipating."

"So far, the numbers Amazon is putting out for the first half of the year makes it seem like the company is not incurring additional cost burdens as other retailers ... The cost of fuel being higher hasn't hurt Amazon from a gross margin or operating margin perspective."