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Amazon Kindles sales, but profits disappoint

SEATTLE — The popularity of Amazon.com's Kindle e-readers continues to help boost Amazon.com's sales. However, net income for the third quarter was disappointing.

Amazon.com reported that net sales for the third quarter increased 44% to $10.88 billion in the third quarter, compared with $7.56 billion in third quarter 2010. Net income decreased 73% to $63 million in the third quarter, or 14 cents per diluted share, compared with net income of $231 million, or 51 cents per diluted share, in third quarter 2010.

“September 28th was the biggest order day ever for Kindle, even bigger than previous holiday peak days – we introduced Kindle Fire for $199, Kindle Touch 3G for $149, Kindle Touch for $99, and our all new Kindle for only $79,” said Jeff Bezos, founder and CEO of Amazon.com. “In the three weeks since launch, orders for electronic ink Kindles are double the previous launch. And based on what we're seeing with Kindle Fire pre-orders, we're increasing capacity and building millions more than we'd already planned.”

For the fourth quarter, Amazon.com expects net sales to be between $16.45 billion and $18.65 billion, or to grow between 27% and 44% compared with fourth quarter 2010. Operating income (loss) is expected to be between $(200) million and $250 million, or between 142% decline and 47% decline compared with fourth quarter 2010.

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