Net sales at Amazon.com increased 27% to $1.86 billion in the third quarter, compared with $1.46 billion in third quarter 2004, the company says. But a one-time charge of $40 million to settle a patent dispute resulted in Amazon’s operating income decreasing 32%.
Net sales at Amazon.com increased 27% to $1.86 billion in the third quarter, compared with $1.46 billion in third quarter 2004, the company says. But a one-time charge of $40 million to settle a patent dispute resulted in Amazon’s operating income decreasing 32% to $55 million in the third quarter, compared with $81 million in third quarter 2004.
In the third quarter sales were up in part because of the company’s new flat rate shipping offer. "For $79 a year, Amazon Prime members get 'all-you-can-eat' free express shipping," says Jeff Bezos, founder and CEO of Amazon.com. "Customers continue to join Amazon Prime and we anticipate even higher enrollment rates as we get closer to the holidays."
In North America, which includes the United States and Canada, third quarter sales totaled $1.04 billion, up 28% from third quarter 2004. Segment operating income increased 16% to $66 million in third quarter 2005 from $57 million in third quarter 2004, Amazon says.
In its latest earnings release, Amazon anticipates that Q4 sales will range from $2.9 billion to $3.2 billion, while operating income is expected to be between $135 million and $210 million.
For the full year, Amazon, No. 1 in the Internet Retailer Top 400 Guide to Retail Web Sites, expects sales to be between $8.4 billion and $8.7 billion and operating income to range from $403 million and $478 million.
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