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Amazon.com Announces Third Quarter Sales up 41% Year over Year - Raises Financial Guidance - Expects Record Holiday Season
Tuesday October 23, 4:01 pm ET
SEATTLE--(BUSINESS WIRE)--Amazon.com, Inc. (NASDAQ:AMZN - News) today announced financial results for its third quarter ended September 30, 2007.
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Operating cash flow was $1.0 billion for the trailing twelve months, compared with $587 million for the trailing twelve months ended September 30, 2006. Free cash flow was $800 million for the trailing twelve months, an increase of 118% compared with $366 million for the trailing twelve months ended September 30, 2006.
Common shares outstanding plus shares underlying stock-based awards outstanding totaled 435 million on September 30, 2007, unchanged from a year ago.
Net sales increased 41% to $3.26 billion in the third quarter, compared with $2.31 billion in third quarter 2006. Excluding the $75 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales grew 38% compared with third quarter 2006.
Operating income increased 207% to $123 million in the third quarter, compared with $40 million in third quarter 2006.
Net income increased 313% to $80 million in the third quarter, or $0.19 per diluted share, compared with net income of $19 million, or $0.05 per diluted share in third quarter 2006.
“Customers continue to respond to our low prices, our free shipping, and the benefits of Amazon Prime. With our ever-increasing selection, customers are now getting this unusual level of service across many different product categories and with depth of selection in each category,” said Jeff Bezos, founder and CEO of Amazon.com. "In our view, putting customers first is the only reliable way to create lasting value for shareowners."
Highlights
North America segment sales, representing the Company’s U.S. and Canadian sites, were $1.79 billion, up 42% from third quarter 2006.
International segment sales, representing the Company’s U.K., German, Japanese, French and Chinese sites, were $1.47 billion, up 40% from third quarter 2006. Excluding the favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, International net sales growth was 33%.
Worldwide Media grew 36% to $2.09 billion in third quarter 2007, compared to $1.54 billion in third quarter 2006.
Worldwide Electronics & Other General Merchandise grew 54% to $1.08 billion in third quarter 2007 and increased to 33% of worldwide net sales compared with 30% in third quarter 2006.
The Company sold 2.5 million copies of Harry Potter and the Deathly Hallows worldwide, making it Amazon’s largest new product release.
The Company launched a public beta of Amazon MP3, a digital music store with Earth's biggest selection of a la carte DRM-free MP3 music downloads. Amazon MP3 has over two million songs from more than 180,000 artists represented by over 20,000 major and independent labels.
Amazon Europe launched a Shoes store and a Baby store on the amazon.co.uk and amazon.de websites, offering customers tens of thousands of items from hundreds of leading brands.
Amazon Europe launched a Home & Kitchen store on the amazon.fr website, offering customers thousands of items from well-known electrical appliance and kitchenware brands.
Amazon.co.jp opened an Apparel & Shoes store offering more than 30,000 items from more than 100 well-known brands.
Fulfillment by Amazon launched in beta on the amazon.co.uk, amazon.de and amazon.co.jp websites, giving small and medium-sized businesses access to Amazon’s fulfillment, customer service, and underlying website technology.
Over 290,000 developers have registered to use Amazon Web Services (AWS), up 25,000 from the prior quarter. AWS also launched a limited beta version of the Amazon Flexible Payments Service (FPS). Amazon FPS is the first payments service designed from the ground up specifically for developers, and provides unprecedented flexibility in the movement of money through a set of web services APIs.
AWS recently introduced several new compute instance types for the Amazon Elastic Compute Cloud, which provide up to eight times more memory, CPU, and storage, enabling developers to support an even broader set of applications.
Amazon Simple Storage Service (S3) continues to be rapidly adopted by developers, and objects in storage have doubled to more than ten billion during the last six months. In addition, we have instituted a Service Level Agreement for Amazon S3 that guarantees operational performance levels.
Financial Guidance
The following forward-looking statements reflect Amazon.com’s expectations as of October 23, 2007. Results may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and consumer spending, world events, the rate of growth of the Internet and online commerce, and the various factors detailed below.
Fourth Quarter 2007 Guidance
Net sales are expected to be between $5.1 billion and $5.45 billion, or to grow between 28% and 37% compared with fourth quarter 2006.
Operating income is expected to be between $221 million and $291 million, or grow between 12% and 48% compared with fourth quarter 2006. This guidance includes $54 million primarily for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional intangible assets are recorded and that there are no further revisions to stock-based compensation estimates.
Full Year 2007 Expectations
Net sales are expected to be between $14.263 billion and $14.613 billion, or to grow between 33% and 36% compared with 2006.
Operating income is expected to be between $605 million and $675 million, or grow between 56% and 74% compared with 2006. This guidance includes $191 million primarily for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional intangible assets are recorded and that there are no further revisions to stock-based compensation estimates.
Posted by: BuzzOnDaBeach
In reply to: Painterguy1 who wrote msg# 143008 Date:7/24/2007 6:41:06 PM
Post #of 147627
Sorry bro. Couldn't resist, but I have to say, NEVER short AMZN on earnings. NEVER. Regardless if they miss, beat, file BK. NEVER short AMZN on earnings. Leave it alone.
Posted by: BuzzOnDaBeach
In reply to: steve0082 who wrote msg# 142418 Date:7/13/2007 3:37:18 PM
Post #of 147626
Were you around in '99? We have the same type of bullish euphoria now that we had then. Yes, 100.00 is not out of the question into the holiday season. 120.00 possible around Jan on it. Wouldn't touch it short.
Time for you to short AMZN tomorrow after earnings at about 101.00, then cover about 110.
Buzz
I wouldn't be shorting any homies here. They price a year out.
Buzz
Spy calls, weeeeeeeeee. Look for 1600 ahead of the fed.
Buzz
Kinda like dow 12,000. eom
I have one word for you .........
midol
Buzz
Inverted H and S breakout:
Buzz
15K defintitely, possibly by January.
Buzz
Nice pic of brig's sister. eom
It was a typo, he meant 14:
Posted by: Rawnoc
In reply to: BuzzOnDaBeach who wrote msg# 145116 Date:9/5/2007 2:12:31 PM
Post #of 146077
Dow 12,000 baby.
Raw
Posted by: BuzzOnDaBeach
In reply to: Rawnoc who wrote msg# 145170 Date:9/6/2007 12:19:46 PM
Post #of 146077
Dow isn't goign anywhere near 12,000 anytime soon, IMO. Should see 14,000 again in the next 6 weeks.
Buzz
Great call Raw!!!! You da man!
SPY calls, weeeeeeeeeeeeeeeeeeeeeeeeeeeeeee
Once the s and p takes out 1550, it's joing to tag 1600 in a heartbeat.
Buzz
13910 and climbing. eom
Kind of like you Fred??? .........
Brig says your a guy, but the rest of us, well .......
;)
Buzz
Grace Jones???
Same thing happened in CA after 94 earthquake. People just walked away from loans due to damage. Real estate tanked, but recovered about three years later. Had very little effect on the overall economy of socal, however.
Buzz
BRIG is the one stuck in the 60's. Here's his latest portrait:
Buzz
ROTFLMAO!!!!!!!!!!!!!!!!!!!!!!!!!
Actually, the lead singer is very good, but had a TERRIBLE cold, and that song is outside his range.
All between 14 and 18.
Thanks Fred! I thought my son's lead was very good. It's a tough guitar part.
Buzz
Hey there OD, thought you might like this,
My son at the Knitting Factory. Singer had a HORRIBLE cold, but my kid pretty much nailed the lead.
Led Zeppelin, Heartbreaker
http://www.davecurtismusic.com/players/KnittingFactory/Heartbreaker.htm
Buzz
Posted by: BuzzOnDaBeach
In reply to: Rawnoc who wrote msg# 145170 Date:9/6/2007 12:19:46 PM
Post #of 145707
Dow isn't goign anywhere near 12,000 anytime soon, IMO. Should see 14,000 again in the next 6 weeks.
Buzz
Revising your outlook on this??
Posted by: Rawnoc
In reply to: BuzzOnDaBeach who wrote msg# 145116 Date:9/5/2007 2:12:31 PM
Post #of 145688
Dow 12,000 baby.
300 to go. eom
SPX calls, weeeeeeeeeeeeeeeeeeeeeeeeee
Don't count on it. No money to be made in bonds for a while now, so equities and commodities place to be.
Buzz
See ya 14K. eom
SPX calls, weeeeeeeeeeeeeeeeeeeeeeeeeeeee
A friend who has coached before said the same thing. Go scout the other teams. Good advice MSGI!
Buzz
OMG, I have been SWAMPED for two weeks, as I'm coaching my son's 4th grade, 8 man flag football team. It's a blast, but I had no idea how much work it would be. Of course, my perfect, color coded offensive and defensive play books have been a lot of the work. But so far, I've had three practices and a parent team meeting, and can tell you the following:
No matter how many conditioning drills I do, it is IMPOSSIBLE to wear out 9 year old boys.
The average attention span of a 9 year old is about 12 seconds, and a few of them give new meaning to the term "chasing the butterflies".
Some parents just really don't get that their kids aren't good athletes and think they should be starting QB despite the fact they can't throw the ball 2 yards - and most of these are the same ones that DON'T spend time out throwing the ball with their kids. (I should note, I do really try to praise the hard workers, regardless of their ability, and at this age everyone should play as learning to be part of a team and having fun is the emphasis. My oldest son doesn't have an athletic bone in his body, and I'm just as proud of him for his music and debate, but geez, I never tried to pretend he was a great athlete. My youngest IS very athletic, and a stud on the field, and that's his thing.)
We should have a pretty good team, not a lot of size but a ton of speed and kids who catch the ball well, and QB who is fast and has a rifle. Defense may be our problem area if our team speed and working together on defense can't overcome the size of some of the other teams.
And it is, so far, just about the most rewarding thing I've ever done. But you can't believe the hours I am putting into this. I'm very organized, and have practices planned to the minute.
First game in 2 weeks. I'll let you know!
Buzz
How's that trip to 12,000 looking? eom
No tax deduction on SECOND properties. If it's their only owned home, and they rent, then it's a deduction.
If it's a second home, you set up a partnership for the rental and decuct as a capital loss from a partnership.
Buzz
Assuming their mortgage at current time is about 500 capital and 2500 interest (if they've owned the home less than 5 years on a 30 fixed), they have a 30,000 a year tax deduction. That will save them about 10,000 a year in taxes.
So the equation is they're paying 36,000 a year, saving ten on taxes, so cost is 26,000 a year, rent is 20,800, so they're losing 5,200 per year plus prop taxes and maintenence.
It's only a "win" situation if the house appreciates more than say 8,000 per year over the term of the rental.
Buzz
I have another version of the "stick" diet, but I don't think I can openly discuss it on a public message board.
But I'd be happy to coach you through it privately. ;)
Buzz
Don't lean too far, lol. eom
What if I have someone bury a bunch of twinkies in the ground, then I dig them up with the stick?
Buzz
Yes. eom
Screw cramer. That Erin is a hotty. eom