UPDATED 10:46 EDT / OCTOBER 22 2010

High Earnings for Amazon, Excited for the Coming Year

Amazon keeps the same high records in sales because of the customers’ affinity for books and electronic gadgets. Analysts raised concerns about the increased spending budget of the 3rd quarter which included the opening of 10 warehouses.

After falling at 4.01 percent, the Amazon shares closed the session at a peak record – influenced by the earnings release.

Economic professionals agreed upon the Amazon’s rising earning in a downturn global background. The net income of Amazon raised 16% in comparison with the same quarter of the foregoing year. The growing numbers in profit are due to the acquisition of the online shoe retailer Zappos.com, too.

Thomas J. Szkutak, the chief financial officer of Amazon, considers the earnings increase is a consequence of the good and wide response of the consumers. Amazon also tried to enhance its sales with diversity and price strategies – but these seem not to be the main efficient tool.

Kindle was also advertised aggressively the e-reader field. It is widely acknowledged that Amazon’s e-reader device has changed the readers’ behavior over the last three years. During the summer time, Jeffrey P. Bezos, the chief executive of Amazon, conducted a powerful sales policy which included the cutting price for Kindle.

The price of Kidle was also responsible for the decrease of Amazon’s operating margin, along with the opening of the new centers. The operating margin dropped to 3.5% in the quarter, from 4.6% – of the last year’s similar period.

It is expected that the Seattle-based company will reach an average of $12.3 billion revenues for the 4th quarter.  Two areas of interest for gaining growth are publishers and developers.  Amazon’s launched a handful of incentives to lure both to its widening platform.


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