Amazon.com’s Revenue Up in Q1, Earnings Drop

Amazon.com grew its revenue in its first quarter, which ended March 31, but its net income fell, as the e-commerce giant faced higher operating expenses compared with the same quarter last year, the company announced Tuesday.

Revenue came in at US$2.28 billion, up 20 percent and exceeding the consensus expectation of $2.23 billion from analysts polled by Thomson Financial.

Net income was $51 million, or $0.12 per share, matching analysts’ consensus expectation, but down from $78 million, or $0.18 per share, in 2005’s first quarter.

Operating expenses grew to $441 million, including a significant jump in technology and content spending, from $350 million, the company said.

Looking ahead, Amazon.com expects revenue in the second quarter in the range of $2.03 billion and $2.18 billion, up between 16 percent and 24 percent compared with 2005’s second quarter. For the full year, the company is forecasting revenue in the range of $9.95 billion to $10.5 billion, up between 17 percent and 24 percent.

Amazon.com warned that its operating profit for the year could be negatively impacted by as much as $50 million if it doesn’t prevail in its appeal of a recent court ruling that let Toysrus.com end a contract between the companies.

-Juan Carlos Perez, IDG News Service

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