Harry Potter Helps Amazon In The Second Quarter
Amazon.com had a strong second quarter increasing its net income on revenue that rose 35 percent.
The New York Times reported that the company's stock in after -hours trading reached a level that has not happened since February 2000. Part of the success was due to the final book of the massively popular Harry Potter series.
The NYT writes," Amazon delivered 2.2 million copies of "Harry Potter and the Deathly Hallows," the final installment in the blockbuster fantasy series. Amazon will count that revenue next quarter, but interest in the book helped drive 8 percent more traffic to the site in the most recent quarter, according to Nielsen/NetRatings. Other purchases that Potter fans tacked on counted toward Amazon's quarter, which ended June 30."
Amazon had reported a net income of $78 million in the second quarter, compared with the net income of $22 million, or 5 cents a diluted share in the second quarter of 2006.
"Our strong revenue growth this quarter was fueled by low prices and the added convenience of Amazon Prime," said Jeff Bezos, founder and CEO of Amazon.com. "More and more customers are taking advantage of Amazon Prime and we're pleased with the acceleration in subscriber growth this quarter."
Revenue increased to $2.89 billion due partly to 27 percent growth in the sale of books, music and DVDs and 55 percent growth in the sale of electronics.
Amazon was able to beat Wall Street estimates of $2.81 billion in revenue as well as beating its own prediction of $2.7 billion to $2.85 billion.
Scott W. Devitt, an analyst at Stifel, Nicolaus & Company, said that Wall Street is beginning to view Amazon as a technology company, like Google and eBay instead of a retail company like Wal-Mart or Target.
"Amazon was viewed as this low-margin retail business, but it's actually a company that will invest in its business and look out to the very long term at the expense of the short term," he said. "Right now the company is reaping the reward of its investments over the last 12 or 18 months."
Some of Amazon's technology projects include Amazon's Unbox movie down load service, which allows users to buy or rent digital movies.
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