Strong Quarter for Amazon Media
by Jim Milliot, PW Daily -- Publishers Weekly, 10/26/2005
Boosted by sales of Harry Potter and the Half-Blood Prince, sales at Amazon.com's North America media segment rose 21% in the third quarter, to $684 million. The sales gain bettered the 17% improvement posted by the media segment in both the first and second quarters. The company said it sold about 1.6 million copies of Potter worldwide, generating sales of about $27 million. Sales for the entire company rose 27%, to $1.86 billion, although net income fell due to a settlement in a patent lawsuit.
The company attributed the sales gain to greater use of its Amazon Prime shipping option and deeper discounts on most products, including books.
The company is continuing to invest heavily in content and new technology in such areas as search capabilities, digital products and new Web platforms. The investment in search technology has allowed Amazon to put about half of the books sold by the company into its Search Inside the Book feature. Amazon chairman Jeff Bezos said he sees a "large opportunity in digital products," although he offered no timetable on when products may be released. The company is widely expected to soon announce a host of digital products.
Looking at prospects for the holiday season, Amazon chief financial officer Tom Szkutak said he was "cautiously optimistic" about the fourth quarter. Total sales for the company are projected to increase 13% to 24% compared to a sales gain of 31% in last year's fourth quarter. Earnings growth is particularly hard to gauge, Bezos said, because this will be the first fourth quarter Amazon Prime will be available. While the shipping option has boosted sales, it is expensive to operate, Bezos acknowledged.|
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