Amazon Profits Double

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According to the Washington Times in the article, “Amazon profit doubles, beats estimates”, there has been controversy by analysts of Amazons future expectations. They believed that the online ecommerce store would show low financial growth by the end of the year. Yet Amazon has already proven to be growing steadily into the next year. In the quarter that ended June 30 of this year, Amazon has earned $158 Million, or .37 cents per share. In the same quarter last year, Amazon earned $78 million, or 19 cents per share. The companies’ revenue climbed 41 percent to $4.06 billion, including a 35 percent leap in North American sales.

Analysts polled by Thomson Financial had expected earnings of 26 cents per share on $3.96 billion in revenue. Obviously Amazon has not been in any pain or recovery stage during harsh economic times. In fact, the corporate has looked into this as a time of investment and has future plans to expand to their consumer audience. According to the Ecommerce times, Amazon announced it was buying digital audio book maker Audible.com for $300 million. Their current investment in technology, the Kindle, has been off the shelves ever since the product first came out. Amazon may have been motivated by the early sales of the Kindle, which the e-tailer said it was finding it a challenge to keep in stock. Who’s to say that it wouldn’t, with its sleek design and portability. The kindle was a great step into the right direction for future profitability. The Kindle is an e-book that can hold numerous books on however much storage space you install via SD (scan disk).

With Amazons appreciative ecommerce web site and their new Kindle e-book, what else could they possibly do? Well, Amazon is getting into the market of digital music and plans on introducing the Kindle to the battle. Their investing in more resources and have planned to compete with iTunes. Amazon is clearly making a run at iTunes, Phil Leigh, host of Inside Digital Media, told the E-Commerce Times. “If anybody can do it, they can.” The demand for digital music through Amazon and market competition with iTunes gives consumers hope for breathing room when it comes to stretching their wallets.

Amazon is responding to consumer demand, said Bill Carr, the company’s vice president of digital music. “We had received thousands of e-mails from Amazon customers around the world asking us when we will make Amazon MP3 available outside of the U.S.” So the key question in this foundation of a plan, is whether or not Amazon will bring strong business to the market place, seeing that iTunes has been around (in a literal sense)? But with the added affect of indifference in comparison to technology, Amazon has something that iTunes lacks. Amazon has already shown a $1.25 billion dollar increase in sales this year and will continue to grow even with the large sums of money being contributed to investment.

References

Amazon profit doubles, beats estimates. Online posting. The Washington Times. http://washtimes.com/news/2008/jul/23/amazon-profit-doubles-beats-estimates/

Amazon Doubles Profit but Stock Struggles on Investor Angst. Online posting. E-commerce News.
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