Amazon profit, sales above view and shares rise

By Alexandria Sage

SAN FRANCISCO (Reuters) - Amazon.com Inc (AMZN.O: Quote, Profile, Research, Stock Buzz) said on Wednesday quarterly profit doubled and sales grew 41 percent, indicating to Wall Street that many cost-conscious shoppers are heading online to save money in a tough economy.

Amazon shares jumped 8 percent, after zig-zagging in early extended trade because an unanticipated gain on an asset sale initially obscured the underlying earnings performance.

"The numbers are good, very solid," Stifel Nicolaus analyst Scott Devitt said. "It shows the company is performing very well relative to the industry."

The company said it benefited from shoppers going online to save on gasoline. Chief Executive Jeff Bezos also said Amazon's Kindle digital book reader was gaining readers, while the number of independent sellers offering goods on Amazon's site continued to grow.

Recent disappointing results from rival eBay Inc (EBAY.O: Quote, Profile, Research, Stock Buzz) and tech giants Apple Inc (AAPL.O: Quote, Profile, Research, Stock Buzz) and Google Inc (GOOG.O: Quote, Profile, Research, Stock Buzz) have worried investors, who seemed unfazed by Amazon nudging lower the midpoint of its 2008 operating income target range.

The company posted second-quarter net profit of $158 million, or 37 cents per share, compared with $78 million, or 19 cents per share, a year earlier. Revenue in the quarter, which is seasonally the slowest, rose to $4.06 billion.

That beat analysts' average revenue forecast of $3.95 billion, according to Reuters Estimates. The profit comfortably topped the average Wall Street target of 26 cents per share, though excluding the European sale the beat was just 2 cents.

WINDFALL FROM SALE  Continued...