Amazon beats the analysts and soars to an all time high

October 23, 2009

Amazon beats the analysts and soars to an all time highIt seems like a distant memory now when people predicted Amazon would never turn a profit, but yet here the company sits with not only record profits but record revenue and stock prices.

According to Bloombergs, the quarterly earnings call from mega-retailer Amazon was a barn burner, and there were good reasons it made shares of the retailer jump $25.04, or 27 percent, to a company all time high of $118.49.

Amazon reported that third-quarter net income increased to $199 million, or 45 cents a share, from $118 million, or 27 cents year-over-year. Overall sales jumped to $5.45 billion for the quarter, beating analyst estimates that had pegged the gross sales at $5.04 billion for the same time period. Nothing like beating your estimates by a cool $410 million.

As the popular e-commerce site enters the all important holiday shopping season in the fourth quarter, analysts are expecting the retailer to hit $8.19 billion in sales, while Amazon itself has set a window of anywhere from $8.13 billion to $9.13 billion.  Nothing like being able to say “give or take a billion dollars,” I guess.

The surprising bit of news is that third-party retailers who sell their items on Amazon have increased to a full 30 percent of the companies revenue, which might explain why eBay is seeing its hold as the number one destination site for shopping erode. Chief Financial Officer Tom Szkutak has also said that Amazon is planning to expand even more into its current product categories as well as expand geographically over time.  As Amazon is already in so many countries, it is difficult to tell if he means they will expand coverage in Amazon’s current countries or expand into new countries, but either way, Amazon is not done growing.

One has to wonder where the expansion of Amazon will end, but for now there seems to be no end in sight, and that has to be worrying some retailers.

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