Earnings: Legal Settlement Drags Down Amazon’s 3Q05

E-tailer Amazon’s net income dropped 44 percent to $30 million or 7 cents a share, for 3Q05, down from $54 million or 13 cents a share in 3Q04. Excluding the impact of a $40 million legal settlement in a patent case, net income still would have been down to $50 million or 12 cents a share — above analysts’ expectations. But the real damage to Amazon’s stock price may come from projections for a less-then stellar 4Q05 — ie holiday season.
Sales were up 27 percent in 3Q05 to $1.86 billion, propelled, in part, by record Harry Potter sales. But free shipping offers and Amazon Prime, the membership program that gurantees free shipping sent costs up 15 percet.
Earnings release | Webcast (5 p.m. eastern)