Amazon’s stock price is up 25% to $117 today, after announcing good earnings and increasing sales projections for the 4th quarter. I own stock in Amazon and have it in my 12 stocks for 10 years portfolio. That portfolio is currently beating the S&P 500 by 500 basis points (for annualized return) with a beta of .96 (meaning with a bit less risk than the S&P 500 historically and an alpha of 4.7).
Operating cash flow for Amazon was $2.25 billion for the trailing twelve months, compared with $1.27 billion for prior year. Free cash flow increased 98% to $1.92 billion from $0.97 billion for the trailing twelve months.
Net sales increased 28% to $5.45 billion in the third quarter, compared with $4.26 billion in third quarter 2008. Operating income increased 62% to $251 million in the third quarter, compared with $154 million in third quarter 2008.
Net income increased 68% to $199 million in the third quarter, or $0.45 per diluted share, compared with net income of $118 million, or $0.27 per diluted share, in third quarter 2008.
“Kindle has become the #1 bestselling item by both unit sales and dollars – not just in our electronics store but across all product categories on Amazon.com. It’s also the most wished for and the most gifted. We are grateful for and energized by this customer response,” said Jeff Bezos, founder and CEO of Amazon.com. “Earlier this week we began shipping the latest generation Kindle. Its 3G wireless works in the U.S. and 100 countries, and we’ve just lowered its price to $259.”
North America segment sales, representing the Company’s U.S. and Canadian sites, were $2.84 billion, up 23% from third quarter 2008. International segment sales, representing the Company’s U.K., German, Japanese, French and Chinese sites, were $2.61 billion, up 33% from third quarter 2008. Worldwide Electronics & Other General Merchandise sales grew 44% to $2.36 billion.
For the quarter that ends in December, Amazon forecast sales of $8.1 billion to $9.1 billion (compared with $8.19 billion in previous analyst estimates).
Amazon continues to build a strong company for the long term. I must admit I think the current stock price might be a bit too high. But I believe in the long term success of the company. They continue to make intelligent, customer focused decisions.
Related: 12 Stocks for 10 Years – July 2009 Update – Another Great Quarter for Amazon (July 2007) – Very Good Amazon Earnings (April 2007) – Amazon Innovation – Jeff Bezos and Root Cause Analysis – Jeff Bezos management quotes