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Julia Wilkinson AuctionBytes Blog
Covering auctions, collectibles and marketplace selling.

Julia Wilkinson is Editor of the AuctionBytes Blog and is author of the "eBay Price Guide," "eBay Top 100 Simplified Tips and Tricks," "My Life at AOL" and numerous ebooks about selling online. You can also find her writing on Yard Salers.
Thu July 22 2010 16:33:01

Amazon.com Announces Second-Quarter Financial Results for 2010

By: Ina Steiner
Sponsored Link
Amazon's conference call with analysts is at 5:00 pm Eastern today, here is the company's press release announcing second quarter 2010 results, full press release with tables is available on Amazon.com's investor relations page.

Amazon.com Announces Second Quarter Sales up 41% to $6.57 Billion
SEATTLE - Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its second quarter ended June 30, 2010.

"We're seeing rapid growth in Kindle, Amazon Web Services, third-party sales, and retail. We're also encouraged by what we see in mobile. In the last twelve months, customers around the world have ordered more than $1 billion of products from Amazon using a mobile device"

Operating cash flow was $2.56 billion for the trailing twelve months, compared with $1.88 billion for the trailing twelve months ended June 30, 2009. Free cash flow increased 29% to $1.99 billion for the trailing twelve months, compared with $1.54 billion for the trailing twelve months ended June 30, 2009.

Common shares outstanding plus shares underlying stock-based awards totaled 465 million on June 30, 2010, compared with 451 million a year ago.

Net sales increased 41% to $6.57 billion in the second quarter, compared with $4.65 billion in second quarter 2009. Excluding the $48 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales would have grown 42% compared with second quarter 2009.

Operating income increased 71% to $270 million in the second quarter, compared with $159 million in second quarter 2009. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating income was $10 million. Second quarter 2009 operating income was negatively impacted by a $51 million legal settlement.

Net income increased 45% to $207 million in the second quarter, or $0.45 per diluted share, compared with net income of $142 million, or $0.32 per diluted share, in second quarter 2009.

"We're seeing rapid growth in Kindle, Amazon Web Services, third-party sales, and retail. We're also encouraged by what we see in mobile. In the last twelve months, customers around the world have ordered more than $1 billion of products from Amazon using a mobile device," said Jeff Bezos, founder and CEO of Amazon.com. "The leading mobile commerce device today is the smartphone, but we're excited by the potential of the new category of wireless tablet computers. Over time, tablet computers could become a meaningful additional driver for our business."

Highlights

    * Readers are responding to Kindle's uncompromising approach to the reading experience. Weighing 10.2 ounces, Kindle can be held comfortably in one hand for hours, has an e-ink display that is easy on the eyes even in bright daylight, has two weeks of battery life, and has free 3G wireless with no monthly fees or annual contracts-all at a $189 price.

    * Amazon.com is now selling more Kindle books than hardcover books. Over the past three months, for every 100 hardcover books Amazon.com has sold, the Company has sold 143 Kindle books. Over the past month, for every 100 hardcover books Amazon.com has sold, the Company has sold 180 Kindle books. This is across Amazon.com's entire U.S. book business and includes sales of hardcover books where there is no Kindle edition. Free Kindle books are excluded and if included would make the number even higher.

    * Amazon sold more than 3x as many Kindle books in the first half of 2010 as in the first half of 2009.

    * The Association of American Publishers' latest data reports that e-book sales grew 163 percent in the month of May and 207 percent year-to-date through May. Kindle book sales in May and year-to-date through May exceeded those growth rates.

    * On July 6, Hachette announced that James Patterson had sold 1.14 million e-books to date. Of those, 867,881 were Kindle books.

    * Five authors-Charlaine Harris, Stieg Larsson, Stephenie Meyer, James Patterson, and Nora Roberts-have each sold more than 500,000 Kindle books.

    * Amazon.com continues to expand Kindle's "Buy once, read everywhere" strategy with this quarter's launch of Kindle for Android. Like all Kindle apps, Kindle for Android includes Whispersync technology, which automatically synchronizes your last page read, bookmarks, notes and highlights across your Kindle, Kindle DX, iPad, iPod touch, iPhone, Mac, PC, BlackBerry, and Android-based devices.

    * Kindle offers the largest selection of the most popular books people want to read. The U.S. Kindle Store now has more than 630,000 books, including New Releases and 106 of 110 New York Times Best Sellers. Over 510,000 of these books are $9.99 or less, including 75 New York Times Best Sellers. Over 1.8 million free, out-of-copyright, pre-1923 books are also available to read on Kindle.

    * North America segment sales, representing the Company's U.S. and Canadian sites, were $3.59 billion, up 46% from second quarter 2009.

    * International segment sales, representing the Company's U.K., German, Japanese, French and Chinese sites, were $2.98 billion, up 35% from second quarter 2009. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 38%.
    * Worldwide Media sales grew 18% to $2.87 billion.

    * Worldwide Electronics & Other General Merchandise sales grew 69% to $3.49 billion. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 70%.

    * The Company introduced Textbook Buyback, an easy-to-use program that helps students lower their textbook costs, giving them great value for their used textbooks.

    * The Amazon.co.uk and Amazon.de websites each launched Grocery stores offering customers free delivery on thousands of new items from brands such as Kraft, Nestlé, Mars, PepsiCo, Proctor & Gamble, and Unilever.

    * Businesses and developers in over 190 countries are taking advantage of Amazon Web Services (AWS). In the first half of 2010, AWS continued significant geographic expansion, launching the first Asia Pacific Region in Singapore as well as extending additional services including Amazon Virtual Private Cloud and Amazon Relational Database Service into the EU.

    * AWS announced a new storage option within the Amazon Simple Storage Service (S3), Amazon S3 Reduced Redundancy Storage (RRS), which enables customers to reduce their costs by storing non-critical, reproducible data at lower levels of redundancy than Amazon S3's standard storage.

    * AWS introduced Cluster Compute Instances, an Amazon Elastic Compute Cloud (EC2) instance type specifically tailored for high-performance computing.

Financial Guidance

The following forward-looking statements reflect Amazon.com's expectations as of July 22, 2010. Our results are inherently unpredictable and 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.

Third Quarter 2010 Guidance

    * Net sales are expected to be between $6.900 billion and $7.625 billion, or to grow between 27% and 40% compared with third quarter 2009.

    * Operating income is expected to be between $210 million and $310 million, or between 16% decline and 24% growth compared with third quarter 2009.

    * This guidance includes approximately $130 million for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional business acquisitions or investments are concluded and that there are no further revisions to stock-based compensation estimates.

A conference call will be webcast live today at 2 p.m. PT/5 p.m. ET, and will be available for at least three months at www.amazon.com/ir. This call will contain forward-looking statements and other material information regarding the Company's financial and operating results.




Comments (38) | Permalink
Readers Comments

Amazon.com Announces Second-Quarter Financial Results for 2010   Amazon.com Announces Second-Quarter Financial Results for 2010
by: My Own Website Not Quite Paying My Bills Yet
       
Thu Jul 22 16:35:46 2010

From Amazon:
North America segment sales, representing the Company's U.S. and Canadian
sites, were $3.59 billion, up 46% from second quarter 2009.

This must be the ''but said he was not satisfied with results in the U.S.
Marketplace, which grew only 2% year-over-year excluding vehicles'' that John
was referring to.
Amazon.com Announces Second-Quarter Financial Results for 2010   Amazon.com Announces Second-Quarter Financial Results for 2010
by: Stepford Cheerleader
       
Thu Jul 22 16:43:28 2010
It must be the economy
Amazon.com Announces Second-Quarter Financial Results for 2010   Amazon.com Announces Second-Quarter Financial Results for 2010
by: Departing seller
       
Thu Jul 22 16:51:59 2010
I've been on eBay for over a decade.
I've been on Amazon for a year.

I have 4 times the number of items on Amazon as I do on eBay, well over 1,000 so far.

Amazon has a superior listing process when it comes to ease of use.  And knowing that it doesn't cost me to keep listing until I run out of merchandise keeps me listing on Amazon.

I'd love to get away from Amazon's high commission, but at least there's a significant sell through rate on Amazon. Merchandise turns over and the bloodstream of my business flows.

Memorial Services for eBay to be announced soon.
Amazon.com Announces Second-Quarter Financial Results for 2010   Amazon.com Announces Second-Quarter Financial Results for 2010
by: Andrew
       
Thu Jul 22 16:56:03 2010
I think JD might want to do a little more than just 'tweak' a few things.
Amazon.com Announces Second-Quarter Financial Results for 2010   Amazon.com Announces Second-Quarter Financial Results for 2010
by: My Own Website Not Quite Paying My Bills Yet
       
Thu Jul 22 17:00:16 2010


Just a reminder tonight on CNBC at 8pm there is a special segment on the EBay story:  Crime Inc:The Counterfeit Story
Amazon.com Announces Second-Quarter Financial Results for 2010   Amazon.com Announces Second-Quarter Financial Results for 2010
by: Where are the cheerleaders
       
Thu Jul 22 17:18:12 2010
"Nothing sells on Amazon. It's dead everywhere"
Amazon.com Announces Second-Quarter Financial Results for 2010   Amazon.com Announces Second-Quarter Financial Results for 2010
by: Sayonara eBay
       
Thu Jul 22 17:35:40 2010
Why does this news feel so good?  Probably because it puts eBay and John Donahoe in their places.

Ebay overall is a successful company, can't take that away from them.  But when Amazon says it's third party business has increased, where do they think the increase came from.  It wasn't from Kindle!  It was eBay sellers who couldn't take the low views, low visits, and low sales from March 30, 2010 till the present.

They're also fed up with the crappy eBay policies towards sellers, the forced Paypal, the Best Match that favors big sellers, the upcoming 'open claim' policy, etc., etc.,etc.

But, hey eBay, sometimes you're HOT, HOT, HOT and sometimes, you're NOT, NOT, NOT. This is one of your NOT times.
Amazon.com Announces Second-Quarter Financial Results for 2010   Amazon.com Announces Second-Quarter Financial Results for 2010
by: Departing seller
       
Thu Jul 22 17:48:24 2010
Okay, I admit it!

I just listed 5 more items on Amazon because it felt like a poke in Donahoe's eye.

But the day is young and I'm going for 50.
Amazon.com Announces Second-Quarter Financial Results for 2010   Amazon.com Announces Second-Quarter Financial Results for 2010
by: ebay seller
       
Thu Jul 22 18:15:11 2010
Yes ebays turnaround plan is working flawlessly for AMAZON THAT IS !!!
Amazon.com Announces Second-Quarter Financial Results for 2010   Amazon.com Announces Second-Quarter Financial Results for 2010
by: Wheeeeeee!
       
Thu Jul 22 18:37:42 2010
Let the good times roll!

It must be this bad economy that everyone is talking about. People just aren't buying like they used to.

Good grief! eBay is such an embarrassment. I don't even like for people to know I sell there anymore (even though I do, for now.)

How difficult is it to create a new Amazon seller's account?

Are the Amazon pay-per-click ads worthwhile?? Maybe I can drive some extra traffic to my site if I bought ads on Amazon.

Amazon.com Announces Second-Quarter Financial Results for 2010   Amazon.com Announces Second-Quarter Financial Results for 2010
by: Digby
       Web Site
Thu Jul 22 18:38:30 2010
Wow !
JD and his board members will choke when they read that.

This must surely force some radical change at ebay.

Or do we wait 2 more quarters for JD's turn around plan to work.
Amazon.com Announces Second-Quarter Financial Results for 2010   Amazon.com Announces Second-Quarter Financial Results for 2010
This user has validated their user name. by: Philip Cohen
       
Thu Jul 22 18:51:37 2010
Let’s face it, how could eBay’s US Marketplace figures be even the two percent increase that they claim; eBay’s US IT system appears to have been effectively crippled since April Fools Day. I would have to wonder if the true figure for US Marketplace third-party sales could actually be a minus figure—if only we could separate the real figures out from the all the eBay spin.
Amazon.com Announces Second-Quarter Financial Results for 2010   Amazon.com Announces Second-Quarter Financial Results for 2010
by: Not Buying It
       
Thu Jul 22 19:29:40 2010
I agree with Philip Cohen! There is NO DOUBT IN MY MIND that the 2% is "fudged"... a LOT!

It wasn't 2% at all. There's NO WAY that could be true.
Amazon.com Announces Second-Quarter Financial Results for 2010   Amazon.com Announces Second-Quarter Financial Results for 2010
by: John
       Web Site
Thu Jul 22 19:59:22 2010
This is great it shows what a horrible job John Donahoe has done, Amazon has kicked their rear and Donahoe knows it, he now says well we have to tweak our US search, no John you have to resign and ebay will have to pray for a miracle to get the sellers who were also buyers to come back that you screwed over. I cannot believe that they would not can this guy at this point what a horrible disservice the board is doing to its users and potential users by keeping this ineeffective and arrogant ceo. John Donahoe you get 0 stars on every level fire yourself
Amazon.com Announces Second-Quarter Financial Results for 2010   Amazon.com Announces Second-Quarter Financial Results for 2010
by: My Own Website Not Quite Paying My Bills Yet
       
Thu Jul 22 20:10:38 2010
''It wasn't 2% at all. There's NO WAY that could be true.''

Don't forget, many sellers went from paying $15 per month to $50 per month for their store. Also, many sellers lost their discounts and that's money in EBays pocket.
Amazon.com Announces Second-Quarter Financial Results for 2010   Amazon.com Announces Second-Quarter Financial Results for 2010
by: Marvin
       
Thu Jul 22 20:12:00 2010
As a *past* ebay seller, I don't know what they could do to get me to come back. Their "screw the seller" tactics have left me downright distrustful of them. Returning would seem to me just another version of S&M.
Amazon.com Announces Second-Quarter Financial Results for 2010   Amazon.com Announces Second-Quarter Financial Results for 2010
by: buck efay
       
Thu Jul 22 20:30:03 2010
HAHA! Happy to say I'm one of the people contributing to Amazon's PHENOMENAL growth:) If John Donahoe was being paid off by Amazon, he still couldn't do more to harm Ebay then he already has! I'd rather pay Amazon 15% then Ebaypal 12% AND NOT SELL ANYTHING! I have paid 25-30% on Ebay when all 4 fees factored in on a low dollar item. And sold for 1/2 what I'm getting elsewhere. And Ebay charges 15% in media anyway + PP fees. Anyone bitching about Amazon's take remember that Ebay charges you even if nothing sells. 11 years abused power seller, well You'll see NO MORE Of my listing money while the TOTAL FAILURE John Donahoe is CEO!
Amazon.com Announces Second-Quarter Financial Results for 2010   Amazon.com Announces Second-Quarter Financial Results for 2010
This user has validated their user name. by: Philip Cohen
       
Thu Jul 22 20:38:18 2010
And, as another eBay user has pointed out, eBay’s US Marketplace 2% “increase” is year over year. The figure for Q2 over Q1, including advertising revenue, is indeed apparently a decrease (-4%).

eBay/PayPal/Donahoe: Dead Men Walking
Amazon.com Announces Second-Quarter Financial Results for 2010   Amazon.com Announces Second-Quarter Financial Results for 2010
by: buck efay
       
Thu Jul 22 20:48:45 2010
Philip, Thanks for pointing that out, missed it. Anyway, a measly 2% increase over last year is still a failure no matter how you slice it. I hope Ina breaks out a chart showing the constant revenue slide since Dumbaho took over. Ebay Dead man walking.
Amazon.com Announces Second-Quarter Financial Results for 2010   Amazon.com Announces Second-Quarter Financial Results for 2010
by: Never gonna get it
       
Thu Jul 22 21:08:30 2010
Ebay will never ever get it.
They added 100,000,000 items to the core and STILL they saw a deceleration in sales.

How much more DUH do you have to get????
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