Amazon hits a home run

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Amazon.com Inc. (AMZN) became the latest internet company to surprise investors in a good way.

Net income increased 24 percent to $177 million in the first quarter, or 41 cents per share, compared with net income of $143 million, or 34 cents per diluted share, in first quarter 2008. Revenue soared 18 percent to $4.89 billion. Excluding the impact of fluctuating currency values, sales would have grown 25 percent.

Analysts expected the Seattle-based company to post a profit of 31 cents on revenue of $4.76 billion, according to Thomson Reuters. The world's largest internet retailer posted solid gains across its business lines but Chief Executive Jeff Bezos singled out the Kindle electronic book reader for special praise.

"We're grateful and excited that Kindle sales have exceeded our most optimistic expectations," he said in the earnings press release.

Among the highlights:
  • North America segment sales were $2.58 billion, up 21 percent from first quarter 2008.
  • International segment sales were $2.31 billion, up 15 percent from first quarter 2008. Excluding the unfavorable impact from changes in foreign exchange rates throughout the quarter, sales grew 28 percent.
  • Worldwide Media sales rose seven percent to $2.72 billion.
  • Worldwide Electronics & Other General Merchandise sales grew 38 percent to $2.05 billion.
Going forward, Amazon expects sales of $4.3 billion to $4.75 billion in the current quarter, a year-over-year gain of between six and 17 percent. Analyst had predicted sales of about $4.6 billion.

Shares of Amazon.com, which soared almost 60 percent over the past three months, rose in after-hours trading. Wall Street analysts still mostly rate the stock a hold.

Bet that will change.
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