DVD, videogames help Amazon Q3 earnings

PHYSICAL: Online retailer's media unit increased 17%

By Susanne Ault -- Video Business, 10/22/2009

OCT. 22 | PHYSICAL: Amazon.com posted much improved earnings for its third quarter, and in part credited rising performance from its media and electronics categories.

The online retailer recorded $199 million in net income for the three months ended Sept. 30. That marks a 68% jump from what it made during the same frame in 2008.

Net sales hiked up 28% to $5.45 billion.

Amazon’s worldwide media unit, which includes DVD, CDs and videogames, increased 17% to $2.93 billion. That performance bucks the general downward trend for these categories at many other retailers through much of 2009.

On a Thursday conference call with analysts, Tom Szkutak, Amazon.com chief financial officer, added that many areas within media, such as videogames, bettered their performance over the site’s second quarter. But he declined to detail Amazon’s media category further.

Szkutak said Amazon customers appreciate the site’s commitment to value.

“This is driven by a lot of the fundamentals, [including] great low prices,” he said.

For the fourth quarter, Amazon estimates it will haul in between $8.13 billion and $9.13 billion in net sales. That represents between 21% and 36% growth over the comparable 2008 period.

Amazon also announced the free application ‘Kindle for PC,’ which lets people read books from the site’s e-reader directly on their computers. This complements Amazon’s earlier rollout of a similar application for the iPhone/iPod. With both apps, people can access the Kindle book selection on outside devices without owning a Kindle e-reader.