January 29, 2009 / 9:27 PM / 11 years ago

Amazon.com profit beats Wall St. view; shares rise

SAN FRANCISCO (Reuters) - Amazon.com Inc on Thursday posted a higher profit and robust holiday sales, and forecast fiscal first quarter sales above expectations, and shares of the online retailer rose 11 percent.

A worker loads a shipment of outgoing boxes at the Amazon.com warehouse facility in New Castle, Delaware, November 24, 2006. REUTERS/Tim Shaffer

An 18 percent revenue jump in the holiday fourth quarter was at the high end of Amazon’s own expectations, and Chief Executive Jeff Bezos cited “unusually strong demand” for its Kindle electronic reader.”

Seattle-based Amazon was expected by analysts to gain the lion’s share of online holiday spending, at a time when consumers dramatically cut back purchases. Its lowered prices and discount shipping program, Amazon Prime, have helped the company lure repeat customers to its site.

“It looks like they took a lot of market share and made substantial gains,” said Jeffrey Lindsay of Sanford C. Bernstein. “The good thing is that Amazon hasn’t had to discount to the extent that people feared to achieve this.”

Hamed Khorsand, analyst at BWS Financial, said Amazon grew faster than the wider online retail industry.

“Gross margin wasn’t as great as we would have liked it, but it was still decent enough and you can’t dispute that the company did very well on the top line,” he said.

Amazon’s net income in the fourth quarter rose 9 percent to $225 million, or 52 cents per share, from $207 million, or 48 cents per share, a year earlier. Revenue rose to $6.7 billion.

Analysts, on average, had been expecting earnings of 39 cents per share on revenue of $6.4 billion, according to Reuters Estimates.

Amazon, which posted quarterly operating income of $272 million, had been expecting a range of $145 million and $305 million on sales growth of 6 percent to 23 percent.

Amazon said it expects fiscal first-quarter operating income to range between $125 million and $210 million on revenues ranging from $4.53 billion to $4.93 billion. Wall Street, on average, has been expecting first-quarter revenues of $4.51 billion.

Amazon is valued at 35 times projected fiscal 2009 earnings, at a premium to competitor eBay Inc and Internet giants like Google Inc or Yahoo Inc at 8, 16 and 29 times forward-looking earnings, respectively.

Shares rose 11.4 percent in after-hours trade to $55.70 after closing at $50 on the Nasdaq.

Additional reporting by Lisa Baertlein and Sue Zeidler in Los Angeles; editing by Carol Bishopric

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