Amazon’s Earnings Triple in Quarter

Amazon.com Inc. said Thursday that international expansion and more free-shipping deals helped the online retailer more than triple its third-quarter profit.

But the results -- and Amazon’s 2005 sales forecast -- fell short of analysts’ expectations, sending the stock tumbling 8% in after-hours trading.

Seattle-based Amazon posted net income of $54 million, or 13 cents a share, up sharply from $16 million, or 4 cents, during the comparable period last year. Profit excluding one-time charges was 17 cents a share, missing Wall Street’s consensus estimate by a penny.

Revenue grew 29% to $1.46 billion from $1.13 billion last year.

“The revenue wasn’t bad; [Amazon] just missed on the bottom line,” said Mark Mahaney, an analyst with American Technology Research. “There needs to be a reset in expectations.”

Amazon executives said they were ready for the crucial holiday shopping season, and they planned to keep trying to attract customers by offering better deals, such as free shipping on more items.

“Our decision to put dollars into lower prices and free shipping instead of TV advertising continues to be embraced by customers,” Chief Executive Jeff Bezos said.

Sales in North America rose 15% to $816 million, while international sales jumped 52% to $646 million. The booming overseas business got a $57-million foreign exchange benefit from the weak dollar.

Amazon said it expected full-year sales of $6.7 billion to $6.9 billion, roughly in line with analysts’ consensus expectations of $6.8 billion.

For 2005, however, Amazon’s revenue forecast of $7.4 billion to $8.15 billion disappointed analysts, who had expected sales of $8.27 billion. The company does not issue guidance on net income.

Amazon shares rose $1.12 to $39.47 in regular Nasdaq trading before the earnings release but fell $3.53 to $35.94 after hours.

“The big issue was there was nothing outstanding about this quarter and the outlook was disappointing,” said Safa Rashtchy, an analyst at Piper Jaffray.

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Reuters was used in compiling this report.