Shock sales surge sends Amazon shares soaring
Investors reassured by Q1 results
Amazon shares rose at least 16 per cent in pre-market trading today after the etailing giant reported a lift in first quarter revenue.
Analysts had been concerned that spending on new products like the Kindle Fire and the usual cost-cutting behaviour of the online firm could heavily impact on profits.
But Amazon said its net income for Q1 2012 was a fairly healthy $130m while its revenues grew to $13.18bn.
The online bazaar is an ardent follower of the idea that you need to spend money to make money and has often worried investors with its heavy spending on new stuff.
But so far, its strategies have worked and despite its predictions that next quarter could yield somewhere between an operating loss of $260m and a profit of just $40m, shareholders seem reassured.
Amazon said its Kindle Fire was the number one bestselling item on Amazon.com since its launch and that nine out of the 10 top sellers were digital products like Kindles, ebooks, movies, music and apps.
The web firm has been experimenting with the world of video-on-demand with its Instant Video services, which it recently released onto the PlayStation 3. Amazon said it now has licensing deals with Discovery and Viacom to add to deals with big partners such as CBS, Fox, NBC Universal, Sony, Warner Bros and Disney. ®