Amazon net sales up, net income down for Q3 2011

Amazon pulled back the financial curtain for Q3 2011, revealing $10.88 billion in net sales for the quarter, a 44 percent hop over this time last year. Net income, however, decreased 73 percent year over year, all the way down to $63 million. The quarter also saw the company’s “biggest order day ever for Kindle,” in keeping with CEO Jeff Bezos — September 28th, the introduction of 3 new reader devices from the corporate. The company’s Q4 report is normally plagued by the arrival launch of the Kindle Touch and the long-awaited Fire tablet .

Amazon.com Announces Third Quarter Sales up 44% to $10.88 Billion; Introduced Four New Kindle Devices for the Holidays

SEATTLE, Oct 25, 2011 (BUSINESS WIRE) –

Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its third quarter ended September 30, 2011.

Operating cash flow increased 19% to $3.11 billion for the trailing one year, compared with $2.62billion for the trailing one year ended September 30, 2010. Free cash flow decreased 17% to $1.53 billion for the trailing one year, compared with $1.83 billion for the trailing 365 days ended September 30, 2010.

Common shares outstanding plus shares underlying stock-based awards totaled 469 million on September 30, 2011, compared with 465 million a year ago.

Net sales increased 44% to $10.88 billion inside the third quarter, compared with $7.56 billion in third quarter 2010. Excluding the $371 million favorable impact from year-over-year changes in foreign currency rates inside the quarter, net sales would have grown 39% compared with third quarter 2010.

Operating income was $79 million within the third quarter, compared with $268 million in third quarter 2010. The favorable impact from year-over-year changes in foreign currency rates in the course of the quarter on operating income was $14 million.

Net income decreased 73% to $63 million inside the third quarter, or $0.14 per diluted share, compared with net income of $231 million, or $0.51 per diluted share, in third quarter 2010.

“September 28th was the most important order day ever for Kindle, even bigger than previous holiday peak days – we introduced Kindle Fire for $199, Kindle Touch 3G for $149, Kindle Touch for $99, and our all new Kindle for under $79,” said Jeff Bezos, founder and CEO of Amazon.com. “Within the three weeks since launch, orders for electronic ink Kindles are double the former launch. And in response to what we’re seeing with Kindle Fire pre-orders, we’re increasing capacity and building millions greater than we’d already planned.”

Highlights

Amazon announced the Kindle Fire, a brand new class of Kindle for movies, TV shows, music, books, magazines, apps, games, and web browsing with the entire content, free storage within the Amazon Cloud, Whispersync, vibrant color touch screen, an impressive dual-core processor, and “Amazon Silk” – Amazon’s new revolutionary web browser that accelerates the facility of the mobile device through the use of the computing speed and gear of the Amazon Web Services Cloud. Kindle Fire is solely $199.
Amazon announced three all-new Kindle e-readers which can be smaller, lighter, and more cost-effective than ever before. The $79 latest generation Kindle is for purchasers who want the lightest, most compact Kindle at a great price. The $99 Kindle Touch includes a straightforward-to-use touch screen. Kindle Touch 3G is the head of the road e-reader with the unparalleled convenience of free 3G where customers never need to hunt or pay for a Wi-Fi hotspot – you only download and skim books anytime and anywhere – excited by $149. Each of those e-readers includes the whole benefits of the foremost advanced electronic ink display that reads like real paper, even in bright sunlight.

Amazon.fr launched the French Kindle Store offering customers an unlimited collection of over 35,000 French-language Kindle books. Amazon also announced that its series of free “Buy Once, Read Everywhere” apps for the hottest devices, including iPad, iPod touch, iPhone, PCs, Macs and Android-based devices, at the moment are available in French-language versions. As well as, Amazon announced that the all-new Kindle with French navigation is on the market at Amazon.fr for less than 99EUR .

Amazon.com announced licensing agreements with Twentieth Century Fox and PBS that permit the millions of Amazon Prime members to immediately stream a broad choice of popular movies and television shows from their vast libraries. These deals will bring the whole choice of Prime instant videos to greater than 12,000 movies and television shows from partners together with CBS, FOX, PBS, NBCUniversal, Sony, Warner Bros., and lots of more.

Amazon Publishing released 61 titles within the quarter, including Kindle bestsellers “The Detachment” by Barry Eisler, “Dove Season” by Johnny Shaw, and “A Small Fortune” by Audrey Braun. Recent acquisitions include Tim Ferriss’ “The 4-Hour Chef,” Penny Marshall’s memoir “My Mother Was Nuts,” and the epic Foreworld Series project led by Neal Stephenson and Greg Bear. Amazon Publishing also announced a brand new imprint, 47North, that is devoted to science-fiction, fantasy, and horror. 47North joins sister imprints AmazonEncore, AmazonCrossing, Powered by Amazon, Montlake Romance, and Thomas & Mercer.

The corporate launched Amazon.es, a Spanish-language website offering customers an enormous choice of books, DVDs, games, music, and consumer electronics at everyday low prices. Amazon.es’s convenient services include Amazon Premium, the local version of Amazon Prime, with unlimited free guaranteed 2-3 day delivery for an annual fee of 14.95EUR . The 1st product sold on Amazon.es was a Blu-ray pack of “Star Wars: The entire Saga” to a brand new Premium customer in Madrid.
North America segment sales, representing the Company’s U.S. and Canadian sites, were $5.93 billion, up 44% from third quarter 2010.

International segment sales, representing the Company’s U.K., German, Japanese, French, Chinese, Italian and Spanish sites, were $4.94 billion, up 44% from third quarter 2010. Excluding the favorable impact from year-over-year changes in foreign currency rates through the quarter, sales grew 33%.

Worldwide Media sales grew 24% to $4.15 billion. Excluding the favorable impact from year-over-year changes in forex rates within the quarter, sales grew 19%.

Worldwide Electronics and Other General Merchandise sales grew 59% to $6.32 billion. Excluding the favorable impact from year-over-year changes in forex rates during the quarter, sales grew 54%.

Amazon Web Services (AWS) announced new features to make it even easier for enterprise customers to make use of the AWS infrastructure. New services like Direct Connect, Identity and Access Management, and Virtual Private Clouds allow enterprises to reliably, securely, and affordably use the prevailing AWS infrastructure for his or her computing needs.

AWS launched GovCloud, a brand new AWS Region designed to permit U.S. government agencies and contractors to head more sensitive workloads into the cloud by addressing their specific regulatory and compliance requirements. AWS also announced it has received Federal Information Security Management Act (FISMA) Moderate Authorization and Accreditation from the U.S. General Services Administration.