The Web retailer Amazon.com Inc's net profit in the second quater of 2007 more than tripled, surprising Wall Street as its U.S. sales jumped and sent shares up more than 20 percent, media reported Wednesday.
Net income in the second quarter rose to 78 million U.S. dollars, or 19 cents per share, compared with 22 million dollars, or 5 cents a share, a year earlier. Revenue rose 35 percent to 2.89 billion dollars in the second quarter while North American net sales rose 38 percent, representing the highest growth in six years for that region.
"It's an amazing performance," said 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."
Chief Financial Officer Tom Szkutak attributed part of the U.S. sales growth to Amazon Prime, a discount shipping program that charges 79 dollars annually for unlimited two-day shipping.
"Subscribers are increasing, customers are buying more, it's becoming a more meaningful part of our overall units. It's certainly impacting the growth you're seeing this quarter," Szkutak told reporters during a conference call.
Third-party business represented 30 percent of worldwide sales in the quarter, Amazon said. With these sales, Amazon takes a transaction commission but avoids inventory and fulfillment issues, thereby increasing profit margins.
"We think this model of having us as a seller as well as third party is very important for customers and also works for us financially as well," said Szkutak. "It should be a meaningful part of our business moving forward."
Source:Xinhua/agencies
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