Amazon CFO: New Kindle will wait until 2009
2:56 pm PDT October 22, 2008 - Amazon's third-quarter earnings call had plenty of positive things to say about their success with the Kindle e-book reader. Good thing the company's happy with it, because it'll be the one and only Kindle for the remainder of the year.
CFO Tom Szkutak confirmed during this afternoon's call that there will be no newer model of the Kindle reader until 2009.
Amazon's third-quarter earnings met previous guidance, but share prices were down in after-hours trading. Fourth-quarter guidance, which Szkutak notes depends heavily on the currently volatile market and the strength of the dollar, indicates net sales growth of between 6 and 23 percent year-over-year.
6:40 pm PDT October 22, 2008 - Despite the song's cheery lyric, it's slightly ominous to have the hold music before the start of an earnings call playing "Penny Lane." But Amazon's numbers are -- with a Q3 net income rise of 48%, to $118 million (27 cents/share) -- better than that.
Except, perhaps, for their stock price. The company's fourth quarter guidance was even broader than usual, with company officials estimating $6-7 billion in revenue working out to 6-23% growth year-over-year.
Though that guidance is meant to take into account everything from exchange-rate volatility to market madness to possible holiday-season discounts to keep in line with competitors' actions, a range that wide means the possibility of results coming in on the low end.
A few surprising statistics emerged on the call, some of them having nothing to do with Harry Potter. (The fictional wizard's final book had a profound effect on numbers for Q3 '07. In the process of taking those into account for year-over-year earnings, Potter's name came up more times than did founder and CEO Jeff Bezos' -- leading one to wonder what portion of the world's economy might be brighter in outlook if J.K. Rowling would simply consent to write another book in the series.)
Kindle readers turn out to be inked-book readers still; Amazon estimates that customers who purchase a Kindle buy 1.6 times as many books for their gadgets as they bought in printed form -- and still buy as many printed books as ever. For titles available in both printed and Kindle formats, Kindle downloads account for about 10% of sales.
As for non-digital goods and their transport, Amazon reported a 71% increase in Amazon Prime unlimited-delivery memberships. To facilitate deliveries, three new fulfillment centers have been added in Indiana, Pennsylvania and Arizona, accounting for an unusually high rate of new hires in Q3 (over 2100).
Amazon share prices were down nearly 14% in after-hours trading, with the current price of $43.15 well below the company's 52-week low of $47.90.