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Online retailer Amazon.com has unveiled a slip in profits despite sales
increasing by a quarter.
The group said profits for the three months to June dipped 32% to $52m
(￡29.9m) from $76m in the same period last year. Sales jumped 26% to
$1.75bn.
Seattle-based Amazon has faced higher costs in
recent months as a result of free and discount
delivery offers.
But despite rising costs earnings beat expectations, coming in at 12
cents compared to forecasts of 8 cents.
The figures did include one-off costs for tax expenses and other items,
without which the group would have boosted its earnings to 16 cents per
share.
Shares in the group rose $3.01, or 8%, to $40.75 in after hours trading
as Amazon's results were released after the bell. In official trade its
shares fell 21 cents to close at $37.74.
The group is facing higher shipping costs after introducing a new Prime
Membership system in February, which provides members with unlimited free
two-day delivery guarantees in the US in return for a flat fee of $79.
"Though expensive for the company, Amazon Prime creates a premium
experience for customers who join, and as a result we hope they'll
purchase more from us in the long term," founder and chief executive Jeff
Bezos said.
The quarterly dip in profits followed a similar drop in the first
quarter when it reported profits had slipped to $78m for the three months
to the end of March from $111m a year ago.
Since its foundation 10 years ago, the company has transformed itself
from a simple book seller into one of the world's biggest online retailers
selling everything from DVDs to loose diamonds.
(BBC) | 
Updated: 2005-07-27 09:08
