Amazon.com's revenue up in Q1, but earnings fall

Amazon.com saw its revenue grow in the first quarter, but earnings fell as the company had higher operating costs.

Amazon.com grew its revenue in its first quarter, ended March 31, 2006, but its net income fell, as the e-commerce giant faced higher operating expenses compared with the same quarter last year, the company announced Tuesday.

Revenue came in at US$2.28 billion, up 20 percent and exceeding the consensus expectation of US$2.23 billion from analysts polled by Thomson Financial.

Net income was US$51 million, or US$0.12 per share, matching analysts' consensus expectation, but down from US$78 million, or US$0.18 per share, in 2005's first quarter.

Operating expenses grew to US$441 million, including a significant jump in technology and content spending, from US$350 million, the company said.

Looking ahead, Amazon.com expects revenue in the second quarter in the range of US$2.03 billion and US$2.18 billion, up between 16 percent and 24 percent compared with 2005's second quarter. For the full year, the company is forecasting revenue in the range of US$9.95 billion and US$10.5 billion, up between 17 percent and 24 percent.

Amazon.com warned that its operating profit for the year could be negatively impacted by as much as US$50 million if it doesn't prevail in its appeal of a recent court ruling that let Toysrus.com end a contract between the companies.

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