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Amazon Net Triples on Electronics Sales; Shares Rise (Update4)

By Danny King

July 24 (Bloomberg) -- Amazon.com Inc., the world's biggest online retailer, said profit more than tripled after it reduced technology spending and boosted sales of electronics. The company increased its annual sales forecast, causing shares to surge 21 percent in extended trading.

Second-quarter net income rose to $78 million, or 19 cents a share, from $22 million, or 5 cents, a year earlier, Seattle- based Amazon said today in a statement. The results beat analysts' estimates by 3 cents.

Revenue rose 35 percent to $2.89 billion on increased sales of electronics, jewelry and other merchandise. North American sales surged 38 percent. The retailer cut back on the rate of spending on its Web sites and on newer products such as the Unbox video-download service.

``Electronics and general merchandise are becoming a larger part of the business,'' said Colin Sebastian, a San Francisco-based analyst with Lazard Capital Markets LLC. ``On the investment side, they've moderated the increases.''

Amazon said sales for 2007 will be as much as $14.3 billion, higher than its April forecast of as much as $14 billion. Analysts surveyed by Bloomberg had estimated $13.8 billion on average.

Shares of Amazon jumped $14.87 to $84.12 at 7 p.m. in trading after U.S. exchanges closed. Earlier they fell $2.49, or 3.5 percent, to $69.25 at 4 p.m. in Nasdaq Stock Market composite trading.

Eighteen analysts surveyed by Bloomberg estimated average net income of 16 cents a share on sales of $2.81 billion.
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Shares of Amazon jumped $14.87 to $84.12 at 7 p.m. in trading after U.S. exchanges closed