Amazon and Netflix both reported strong earnings Thursday, easily topping analysts’ expectations. Amazon projected strong holiday earnings, while Netflix upgraded its forecasts for the fourth quarter.
Amazon’s profits were up 69% for the third quarter. Its stock soared almost 15 percent in extended trading, hitting a high for the decade.
The company made $199 million, or 45 cents per share, in the third quarter, handily beating the Street estimate of 33 cents per share. Revenue rose 28 percent to $5.45 billion, also topping expectations.
The online retail giant cited strong revenues from its Kindle book reader.
"Kindle has become the No. 1 bestselling item by both unit sales and dollars — not just in our electronics store but across all product categories on Amazon.com," Amazon CEO Jeff Bezos said in a prepared statement.
DVD-by-mail service Netflix said profits were up 48 percent in Q3. The company said it netted a gain of 510,000 subscribers over the summer.
The third-quarter earnings of 52 cents a share, or $30 million, topped analysts’ expectations of 46 cents to 49 cents. Revenues for the quarter were up 24 percent to $423 million.
Netflix stock was up 3.7 percent in Thursday’s trading, before the earnings were announced, but it surrendered those gains after hours. The company’s stock has risen more than 66 percent for the year.
"Our business momentum is strong and our third quarter performance keeps us solidly on course for a record 2009," said Reed Hastings, Netflix co-founder and chief executive officer of the Los Gatos, Calif., rental company. "Our differentiated service, which combines DVDs delivered quickly by mail and movies streamed instantly over the Internet, is a key element driving our growth."
The company also upgraded its guidance for the fourth quarter, for net income of between $21 million and $26 million, with revenues of up $446 million.