Amazon disappoints despite growth of more than 40%

Amazon disappoints despite growth of more than 40%

<p>International sales at Amazon.com grew 35% in its second-quarter of 2010, helping overall sales at the giant retailer rise 41%. But despite a 45% jump in profit, the number was short of analysts&#39; expectations, sending shares down in after-hours trading.<br /><br />International segment sales, representing the company&#39;s UK, German, Japanese, French and Chinese sites, were $2.98bn, up 35% from second quarter 2009. Excluding the unfavourable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 38%. Operating income grew to $206m, compared with $179m. <br /><br />International media sales grew 20% to $1.6bn, with US media sales up 15% to $1.3bn. Overall worldwide media sales grew 18% to $2.9bn.<br /><br />Net sales at Amazon increased 41% to $6.57bn in the second quarter, compared with $4.65bn in second quarter 2009. Excluding the $48m unfavourable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales would have grown 42% compared with second quarter 2009. Operating income increased 71% to $270m in the second quarter, compared with $159m in second quarter 2009. <span class="ccbnTxt">Net income increased 45% to $207m.</span></p><p>According to the Wall Street Journal the results caught investors and analysts unaware especially after Amazon had said earlier in the week that sales of digital books were now outpacing those of conventional print books. Amazon blames the profit shortfall on increased infrastructure costs and on employing more than 2,000 new staff. </p><p>Some analysts said they worried the e-commerce giant would be hit if the US consumer&#39;s desire to buy faded, even though Amazon reported robust sales growth. Shares fell 13% to $104.97.<br /><br />Amazon also revealed some more e-book statistics. Reiterating that it was selling more Kindle books than hardbacks, Amazon also said that it had sold three-times as many Kindle books in the first half of 2010 as in the first half of 2009. Five authors&mdash;Charlaine Harris, Stieg Larsson, Stephenie Meyer, James Patterson, and Nora Roberts&mdash;have each sold more than 500,000 Kindle books. It also revealed that it had captured 76% of James Patterson&#39;s e-books sales to date.</p><p>Amazon.co.uk&#39;s managing director Brian McBride has said sales of the Kindle have increased each month since the iPad went on sale in April. Speaking on Radio 4&#39;s Today programme he said: &quot;iPad has stimulated the desire for people to do things in a mobile fashion. We think it&#39;s great. Two things; we have sold more Kindle devices, which means we have sold more Kindle books. But we are also selling Kindle books to iPad users because&nbsp; they have downloaded the Kindle app. So we are winning in both ways.&quot; </p>