Amazon shares jump 10% on results

Amazon, the world’s largest online retailer, saw its shares jump more than 10 per cent in after-hours trading on Thursday, as it announced quarterly sales that outperformed both its bricks-and-mortar competitors and the US e-commerce sector as a whole.

In North America, Amazon’s total sales rose 18 per cent, contrasting with the overall 3 per cent decline in US holiday e-commerce sales estimated by ComScore Media Metrics this month.

Amazon’s global net sales also rose 18 per cent to $6.7bn. International sales – including the UK, France, Germany, Japan and China – rose 19 per cent to $3.07bn. At constant currency rates, the international sales would have risen 31 per cent.

Jeff Bezos, Amazon’s chief executive and founder, did not comment during a call with investors on speculation that the company will unveil a second version of its Kindle electronic book reader on February 9.

He said that the company had been surprised by the strong level of demand for the Kindle in the fourth quarter, which led to it being out of stock for several weeks before Christmas.

“We had anticipated strong demand, and what we saw was stronger than that,” he said.

Mr Bezos added that Amazon was pushing ahead with efforts to establish itself as a provider of enterprise-level computing services, building on its existing business in the provision of cloud computing services.

Mr Bezos said Amazon already had some enterprise level clients, adding: “We expect that trend to continue.”

Amazon is also exploring the provision of computer services to state and federal government agencies.

Earnings rose 9 per cent to $207m, or 48 cents per diluted share.

Amazon issued a broad forecast for its current quarter, saying that sales could rise anywhere between 9 per cent and 19 per cent, or $4.2bn-$4.9bn.

Forrester Research, the e-commerce consultants, said on Thursday that it expected US online retail sales growth to slow to 11 per cent this year, reflecting both the impact of the economic downturn and the slowing expansion of internet use.

It predicted that the total to be spent online in 2009 would be $156bn, up from $141bn last year, with growth slowing from 13 per cent in 2008 and 18 per cent the previous year.

Sucharita Mulpuru, a Forrester analyst, said that despite the slowing growth, e-commerce continued “to capture market share from brick-and-mortar stores” because of its low prices and convenience.