Amazon.com announced earnings for its third financial quarter of 2009 and saw share prices soar in early morning trading today. Amazon.com stock was selling at $214 per share, up 22 percent from its end-of-day low yesterday of $198.
Strong Kindle sales continued to drive profits, as the company's eBook reader became the No. 1 best-selling item at Amazon.com across all product categories. Amazon recently released an international version of the Kindle.
In a press release, the company reported that net sales increased 28 percent to $5.45 billion in the third quarter, compared with $4.26 billion in the third quarter of 2008.
Operating cash flow was $2.25 billion for the trailing 12 months, compared with $1.27 billion for the trailing 12 months ended Sept. 30, 2008. Free cash flow increased 98 percent to $1.92 billion for the trailing 12 months, compared with $0.97 billion for the trailing 12 months ended Sept. 30, 2008.
In answer to a question about what the company would do with its available cash, Thomas J. Szkutak, Amazon's senior vice president and CFO, said that the company was considering a "number of different types" of acquisitions.
The company said that its online Kindle eBook store now has more than 360,000 books, 7,000 blogs and over 90 major newspapers available for download. According to Szkutak, Amazon has Google-esque aspirations for its catalog.
"Again, keep in mind from a Kindle perspective, our long-term vision is to have every title ever printed in any language available on Kindle in less than 60 seconds. It's certainly a big goal and something the team is certainly working towards," Szkutak was quoted as saying in a transcript of the earnings call posted on Seeking Alpha.
In fourth-quarter guidance, Amazon said net sales are expected to be between $8.125 billion and $9.125 billion, or to grow between 21 percent and 36 percent compared with the fourth quarter 2008. Operating income is expected to be between $300 million and $425 million, or to grow between 10 percent and 56 percent compared with the fourth quarter 2008.
Amazon is seeing its first real competition in the eBook market with recent entries to the space from Barnes & Noble and Sony. Just this week, Barnes & Noble unveiled the Android-powered Nook, which will sell for $259 and includes a color touchscreen embedded at the bottom of the device. While Amazon's Kindle is powered by Sprint, the Barnes & Noble device gets its wireless connection from AT&T.