Amazon quarterly net profit up 16 per cent

The Seattle, Washington-Based Amazon said net profit rose 16 per cent in the third quarter over a year ago to $231 million  while revenue increased 39 per cent to $7.56 billion.

Earnings per share of 51 cents were better than the 45 cents per share expected by Wall Street analysts.

Amazon said it expected revenue of between $12 billion  and $13.3 billion  in the fourth quarter, an increase of between 26 per cent and 40 per cent compared with the fourth quarter of last year.

"This holiday season we'll have the best prices, the biggest selection, the highest in-stock, and the fastest delivery in our history," Amazon founder and chief executive Jeff Bezos said.

Amazon shares shed 4.23 per cent in after-hours trading to $158 as declining operating income appeared to weigh on investors.

Citi analyst Mark Mahaney was not overly concerned.

"The revenue growth story at Amazon remains impressive," Mahaney said. "As expected, there is a near-term margin hit due to the company's distribution center, fulfillment and marketing investments.

"These investments should set up Amazon for sustained top-line growth for some time to come, and we should see margins and operating income growth improve and reaccelerate in 2011."

Amazon does not release sales figures for the Kindle but said the latest generation of the electronic readers are the "fastest-selling Kindles of all time and the bestselling products on Amazon.com and Amazon.co.uk."

"More new generation Kindle devices were ordered in the first 12 weeks of availability than in the same time frame following any other Kindle launch," Amazon said.

Amazon unveiled two new versions of the Kindle in late July, including one that sells for $139, its lowest price yet.

Amazon cut the price of the Kindle and revamped the line in the face of a threat in the e-reader market from Apple's iPad, the Sony Reader and the Nook from Barnes & Noble.

Amazon said North America sales rose 45 per cent over a year ago to $4.13 billion  while international sales from the company's British, Chinese German, French and Japanese sites rose 32 per cent to $3.43 billion.

Amazon said media sales, which include books, music, film DVDs, video games and other items, grew 14 per cent to $3.35 billion while electronics and general merchandise sales grew 68 per cent to $3.97 billion.