SEATTLE – Internet retailer Amazon.com Inc. said Tuesday that its third-quarter earnings fell by about a third, but the company still managed to beat analysts’ expectations, and its shares surged in after-hours trading.
The Seattle-based company reported net income of $19 million, or 5 cents per share, for the three months ended Sept. 30. That compares with earnings of $30 million, or 7 cents per share, in the same period a year earlier.
Sales for the quarter rose 24 percent to $2.31 billion, from $1.86 billion in the same quarter last year. The company said sales would have grown by 23 percent if it had not benefited from foreign exchange rate changes.
Analysts polled by Thomson Financial were expecting earnings of 3 cents per share on average, on revenue of $2.25 billion.
Amazon.com shares rose 75 cents, or 2.28 percent, to close at $33.63 in trading Tuesday on the Nasdaq Stock Market. The company reported earnings after the markets closed. In after-hours trading, shares were up another $4.77, or more than 14 percent.
“I think it was probably a little bit of relief,” analyst Dan Geiman with McAdams Wright Ragen said of the stock price surge.
Last quarter, Amazon shares plummeted after the company disappointed investors with a drop in earnings that it attributed to cheap or free shipping deals and increased technology spending.
Amazon pledged to curtail the growth of technology and content spending, but Geiman said some analysts wondered whether the company could keep that promise. Tuesday’s results showed that it could, he said.
Still, the Internet retailer made clear that it plans hefty investments in those fields.
In a conference call with journalists, Amazon Chief Financial Officer Tom Szkutak said the drop in quarterly earnings was partly because the company continued such spending during the quarter. Amazon.com has launched several new initiatives lately, including the Amazon Unbox digital video download service, amid efforts to counter an ever-growing group of online competitors.
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