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Sales up but profits down at Amazon

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Impressive sales figures for its Kindle e-book reader helped online retailer Amazon.com’s sales rise in the first quarter of 2011, but profits were down due to a plethora of new investments.

While net sales for the three months ending March 31st increased 38 per cent year-on-year to $9.86 billion (£5.98 billion) and operating cash flow was up nine per cent to $3.03 billion for the trailing 12 months, net income dropped 33 per cent to $322 million.

With worldwide electronics & other general merchandise sales growing 59 per cent compared to Q1 in 2010, it appears that strong trading of products such as the Kindle was offset by investments in new devices for many of its global markets.

Amazon.com founder and CEO Jeff Bezos was positive when reflecting on the figures and he took the opportunity to explain some of the new initiatives.

“In the last 90 days, we announced Kindle with Special Offers, Kindle Library Lending, Audible audiobooks on Kindle, Appstore for Android, Amazon for Windows Phone 7, Checkout by Amazon in both Germany and the UK, a Kindle Store in Germany, Cloud Drive, Cloud Player and Prime Instant Video - just to call out a few of the things we’ve been working on,” he said.

“We love inventing on behalf of customers and have never been more excited about the long-term opportunities.”

Today’s trading figures are the first set of results to be published since Brian McBride stepped down as Managing Director of Amazon.co.uk in January due to health reasons.

He was replaced by former Amazon Vice President for Media Products Christopher North, and a strong company performance appears to have continued under the new leader.

International segment sales, which represent the company’s UK, German, Japanese, French, Chinese and Italian websites, totalled $4.39 billion in Q1 - a 31 per cent increase year-on-year.

Published on Wednesday 27 April by Editorial Assistant

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