Kindle e-book reader helps Amazon sales to hot up

AMAZON, the world's largest online retailer, beat third-quarter revenue expectations helped in large part by sales of ebook reader Kindle, the most popular product on its UK website.

Despite the upbeat performance, the US firm's Nasdaq-quoted shares fell in yesterday's early trading after Amazon predicted its fourth-quarter growth would come short of market expectations.

In particular, Amazon has stepped up its use of television commercials to promote the Kindle, which is now available in a thinner wi-fi version that is cheaper than its predecessor run over mobile phone networks. The company is also spending more on its recently-acquired Zappos.com shoe site, while expanding warehousing space to handle its growing lines of clothing and large electrical items.

Revenues during the third quarter rose by 39 per cent to $7.56 billion (4.82bn). Net income was 16 per cent higher at $231m, up from $199m a year earlier. For the final three months of the year, Amazon is predicting operating income of between $360m and $560m. Analysts had previously been anticipating fourth-quarter operating profit in the region of $620m.

Amazon doesn't disclose Kindle sales, but analysts estimate the ereader will generate $2.8bn in revenues this year for the company. That is expected to rise to $5.3bn in the following 12 months.