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Amazon shares soar on Q2 earnings

July 24th, 2008 • Related • Filed Under

SEATTLE, Jul 23, 2008. Amazon.com announced financial results for its second quarter ending June 30, 2008. Net sales increased 41% to $4.06 billion in the second quarter, compared with $2.89 billion in second quarter 2007. Excluding benefits of foreign exchange rates through the quarter, net sales grew 35% compared with second quarter 2007.

Operating income increased 86% to $217 million in the second quarter compared with $116 million in second quarter 2007. Excluding benefits of foreign exchange rates, operating income grew 71% compared with second quarter 2007.

Net income increased 102% to $158 million in the second quarter, or $0.37 per diluted share, compared with net income of $78 million, or $0.19 per diluted share, in second quarter 2007.

“Customers continue to take advantage of our low prices, Amazon Prime and free shipping. Prime membership costs less than a tank of gas - more and more customers are joining the program and enjoying its benefits.” said Jeff Bezos, founder and CEO of Amazon.com.

Highlights from the announcement

Worldwide Media sales grew 31% to $2.41 billion in second quarter 2008, compared with $1.83 billion in second quarter 2007.
Worldwide Electronics & Other General Merchandise sales grew 58% to $1.53 billion in second quarter 2008, compared with $0.97 billion in second quarter 2007, and increased to 38% of worldwide net sales compared with 34%.
North America segment sales, representing the Company’s U.S. and Canadian sites, were $2.17 billion, up 35% from second quarter 2007.
International segment sales, representing the Company’s U.K., German, Japanese, French and Chinese sites, were $1.89 billion, up 47% from second quarter 2007, and increased to 47% of worldwide net sales compared with 45%. Excluding the favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, International sales grew 34%.
Over 400,000 developers have registered to use Amazon Web Services (AWS), up more than 30,000 from last quarter.
Amazon.com introduced a limited beta version of Amazon Video On Demand

Wall street liked the results and shares were up almost 9% after the news.

The company also provided guidance for Q3 and the rest of the year

Net sales are expected to be between $4.200 billion and $4.425 billion, or to grow between 29% and 36% compared with third quarter 2007. Operating income is expected to be between $115 million and $160 million.
For full year 2008, Net sales are expected to be between $19.35 billion and $20.10 billion, or to grow between 30% and 35% compared with 2007. Operating income is expected to be between $745 million and $920 million, or to grow between 14% and 40% compared with 2007.

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