Amazon on the upswing in second quarter

Sales of media products rose 31%

By Danny King -- Video Business, 7/23/2008

JULY 23 | Amazon.com’s second-quarter earnings doubled as the world’s largest Internet retailer boosted sales of electronics good while experiencing continued growth overseas. The retailer also said third-quarter sales will likely beat analysts’ estimates.

 The company increased sales of media products by 31%. It doesn’t break out digital sales—Amazon last week added video-on-demand streaming to its existing Unbox download offerings-- or revenue from specific media and electronics categories.

Net income surged to $158 million, or 37¢ a share, from $78 million, or 19¢, a year earlier, as revenue jumped 41% to $4.06 billion, Seattle-based Amazon said today. The company was expected to earn 26¢ a share on revenue of $3.96 billion, the average analyst estimate in a Thomson Financial survey.

Amazon benefitted from both a continued rise in electronic commerce and its own inroads into product categories such as electronics, Citigroup analyst Mark Mahaney wrote in a note to clients earlier this week. Growth in electronic commerce accelerated to 12% in the second quarter from 10% in the first quarter, Mahaney wrote, citing ComScore.

The company has “market share gains due to an increasingly superior online shopping experience (and) continued traction with high-end consumer electronics products,” Mahaney wrote.

North America sales rose 35% while overseas revenue jumped 47%.

Amazon said third-quarter sales will be between $4.2 billion and $4.425 billion, compared with the average analyst estimate of $4.23 billion.

Amazon said last week that it replaced its Unbox video-download service with a video-on-demand service that allows customers to stream television and movie content in an effort to continue to build media revenue. The company also has an agreement with Sony in which owners of the TV-makers Bravia HD sets can buy a component allowing direct-to-TV downloads.