Amazon posted another huge increase in sales in the third quarter ended September 30, with total revenue rising 44%, to $10.88 billion, but continued investments in infrastructure and technology led to a 73% decline in earnings to $63 million. For the fourth quarter, Amazon predicted that sales will increase between 27% and 44%, but gave an extremely wide earnings forecast, saying results could range from a loss of $200 million to earnings of $250 million; even at the high end of the range, Amazon’s fourth quarter bottom line will be below that in 2010.
The company said it is felling "very good" about overall demand, and said its wide revenue guidance for the fourth quarter was in keeping with history of planning for uncertain market conditions. Amazon said it expects to see record sales of digital devices in the fourth quarter with sales of content and advertising trailing into the first quarter of 2012. To meet growing sales demand, Amazon will open an additional two new fulfillment centers this quarter, giving them 69 by the end of the year, an increase of 17.
In its customary manner of announcing hits without numbers, Amazon said that based on the pre-orders it has received for its tablet, the Kindle Fire, "we’re increasing capacity and building millions more than we’d already planned." Pre-orders for its new e-ink devices are double the previous launch. There is speculation that Amazon could ship 2.5 million Kindle Fires at launch on November 15. The company called the new Kindle family of products "great products at premium prices" and acknowledged that it views Kindle's worth not just on the price of the device, but also includes the value of the content it can sell through the device. Kindle owners buy more content than non-owners, the company reiterated. All digital content will be easy to access through Fire, Amazon said.
In a publishing-related statistic, Amazon said Amazon Publishing released 61 titles in the third quarter.
In sales by segment, North America media sales (home to books and e-books) rose 21%, while international media sales increased 26%, to $2.2 billion. Sales in the North American electronics and other general merchandise segment (home to Kindle) jumped 56%, to $3.7 billion, while international egm sales rose 45%, to $2.2 billion.
