What recession? Amazon posts amazing second quarter, but downplays Kindle
Second-quarter operating income fell from $217 million in Q2 2008 to $159 million this spring. But that diminished number included a $51 million writedown for a settlement with Toys"R"Us. Likewise, last year's stronger number included a $53 million one-time, non-cash gain for sales of European DVD rental assets. So on a normalized basis, operating income would have risen by roughly $34 million. Investors applauded, sending shares up by more than 5 percent in the aftermarket.
Free cash flow rose to $1.54 billion for the last 12 months. Translation? Amazon has a lot more money to play with (to buy properties like competitor Zappos.com). However, shareholders might be a little concerned that Amazon continued to dilute its shareholder base, adding 5 million shares over the second quarter in 2008.
For those shareholders who want Amazon to make more money in shipping, Amazon appears headed in the opposite direction. "We're pleased that customers saved more than
Notablly absent from the release were specific numbers breaking out sales of the new Kindle -- leading to some concerns that perhaps the introduction of the DX this year did not go as well as hoped.
Amazon issued very wide guidance for the third quarter, saying sales growth could range from 11 percent to 23 percent. That's perhaps an indication that Amazon is still unsure how bad the economy will get, and how that will impact the company. But if this quarter is any indication, Amazon has nothing to worry about.