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'Bellwether we're not'

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Has Amazon noticed a drop in consumer confidence? Don't even ask the question.

"We're probably not the best bellwether for the economy," CFO Thomas Szkutak said this afternoon during a conference call with industry analysts and reporters. "Just look at our overall growth rates for Q2."

During the quarter ending June 30, Amazon pulled in revenues of $4.06bn, a 41 per cent increase from the same quarter last year. And if you exclude the benefits of foreign exchange rates, net sales still hit $3.9bn, a 35 per cent increase.

The mega etailer also doubled its profits during Q2, from $78 million a year ago to a hefty $158 million. But much of this was down to the sale of the company's European DVD rental assets - a $53 million non-cash gain.

When that $158m figure first hit the net, Wall Streeters pumped the company's stock a good 8 per cent before the afternoon bell. But then they got wise to all those European DVDs, and share price dipped back down. Last we checked, it was up more than 3 per cent in after hours trading.

Even if you ignore the DVD assets, Amazon bettered Wall Street expectations. Operating profit margins grew to 5.3 percent of total sales, up from 4.0 percent a year ago. The Wall Street guess men has expected margins to land somewhere between 3.3 and 4.3.

On Wall Street, beating expectations is extremely important. ®

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