Amazon.com said Thursday that its second-quarter earnings fell while sales rose, as the leading online retailer recorded a $51 million payment to settle a long-standing dispute with former partner Toys R Us.
Amazon earned $142 million, or 32 cents per share, in the April-June quarter, 10 percent lower than the profit of $158 million, or 37 cents per share, a year ago. Analysts polled by Thomson Reuters expected a penny less per share.
Sales climbed nearly 15 percent to $4.65 billion, slightly below analyst estimates of $4.69 billion. Amazon’s sales were helped last year by a $53 million non-cash gain from the sale of European DVD rental assets.
The company’s eReader, the Kindle, available exclusively in North America, continued to sell well. It uses Sprint’s network.
“Kindle sales continue to exceed our expectations and we reduced the price of Kindle, the number one best seller in our consumer electronics store, to $299,” said Thomas J. Szkutak, Amazon’s CFO, according to a Seeking Alpha earnings call transcript.
North American gross profit grew 20 percent to $672.0 million and gross margin increased 161 basis points to 27.4 percent, driven by increases in third-party product sales, improvement in inventory management, including vendor pricing, partially offset by lower prices and changes in product mix.
Szkutak expressed some enthusiasm for taking the Kindle overseas, as the device is currently only available in North America.
“In terms of Kindle international, it’s certainly an opportunity. Customers have certainly expressed an interest and we have a long-standing practice of not talking about what we might do, but certainly it’s clearly an opportunity
When asked whether mobile would be a material portion of Amazon’s revenue in the future, Szkutak was optimistically cautious.
“We are going to continue to innovate in that space and it’s difficult to say how big that could be over time but it’s certainly something that we’re excited about and we are investing in,” Szkutak said.
With the arrival this week of a Barnes & Noble eBookstore, Amazon saw what could be its first real competition in the digital book market. On Tuesday, Barnes & Nobel announced the launch of an eBookstore, and the pending launch of a dedicated eReader device from Plastic Logic.
