Amazon claims its strategy of cutting costs and offering lower prices for its books, CDs and other stuff is beginning to pay off.

Publishing its Q1 results for the first three months of the year the monster etailer reported that sales had jumped 28 per cent to $1.08bn, up from $847m in the same quarter last year.

While increasing turnover, it also managed to hammer down its net loss from $23m in Q1 2002 to $10m this year.

"Our strategy of driving down costs to give customers lower prices continues to pay off," bubbled CFO Tom Szkutak.

Elsewhere, Amazon's international operations in the UK, Germany, France and Japan saw sales leap 68 per cent in Q1 to $379m.

Looking ahead, Amazon reckons Q2 sales should grow by up to 30 per cent to between $1bn and $1.05 billion with operating income running in at between $45m and $60m. ®