Amazon profits climb in 3Q but so do expenses

More shoppers flocked to Amazon.com Inc.’s website during the third quarter, helping the online retailer’s net income climb 16 percent and easily beat analyst expectations.

However, the Seattle-based company said operating expenses climbed as it increased its ability to fill customer orders. Shares of the company fell in after-hours trading.

For the July-September quarter, Amazon earned $231 million, or 51 cents per share — 3 cents more than what analysts polled by Thomson Reuters expected, on average. This compares with a profit of $199 million, or 45 cents per share, in the year-ago quarter.

Revenue rose 39 percent to $7.56 billion, higher than the $7.36 billion analysts expected.

Revenue from Amazon’s largest sales category, electronics and other general merchandise, shot up 68 percent to $3.97 billion. Revenue from books, CDs, DVDs and other media grew 14 percent to $3.35 billion.

The company, which has never given precise details about sales of its Kindle electronic reader, said that a larger number of its latest Kindle device was ordered in the first 12 weeks it was available than in the same amount of time after any other Kindle launch. The newest Kindle, which was priced more cheaply at $139 and uses Wi-Fi to wirelessly download content from Amazon’s Kindle Store, was released during the quarter.

Amazon said that its fulfillment costs climbed 46 percent to $680 million.

In a conference call with reporters to discuss the company’s quarterly results, Chief Financial Officer Tom Szkutak said this figure rose because of 13 centers Amazon has opened or will open this year to fill customer orders, both for its own retail business and for its business of filling orders for other sellers.

The company’s marketing spending also jumped, climbing 62 percent to $241 million. Amazon, which generally focuses on advertising online, has been branching out by running commercials for the Kindle.

For this quarter, Amazon predicted revenue will total $12 billion to $13.3 billion — a range that would indicate 26 percent to 40 percent growth over last year’s fourth quarter.

Analysts were looking for $12.3 billion in revenue.

Amazon’s stock fell $7.01, or 4.25 percent, to $157.99 in after-hours trading after the release of results. The shares had finished regular trading up $6.30, or 4 percent, at $164.97.