Amazon sales leap but profits weighed down

Amazon reported that its profit slipped as revenue leapt on hot sales of Kindle electronic readers subsidized by advertising. Amazon profit was weighed down by expenses related to beefing up the company's operations and developing new products. Amazon said revenue in the recently ended quarter jumped 51 percent to $9.91 billion but net profit fell eight percent to $191 million in comparison with results logged in the same period last year. "Low prices, expanding selection, fast delivery and innovation are driving the fastest growth we've seen in over a decade," Amazon.com founder Jeff Bezos said in a release. He noted that Kindle 3G with Special Offers priced at $139 has become the Seattle-based online retailer's top selling e-reader since being released two weeks ago. The cut-price version of Amazon's Kindle 3G electronic reader is sponsored by US telecom carrier AT&T. The same e-reader without on-screen ads is priced at $189. In May, Amazon began selling Wi-Fi-only Kindles featuring advertising and discounted prices. The AT&T version lets users download books wherever there is mobile telephone coverage. The company has declined to comment on recent reports that it plans to unveil a tablet computer by the end of the year in a bid to carve out a slice of a growing market dominated by Apple's iPad. Amazon is also rumored to be poised to release new Kindle models. "We will not talk about what we might or might not do," Amazon chief financial officer Tom Szkutak said when asked about tablet computer plans in an earnings conference call. He said the company has been investing heavily to support its tremendous growth. Amazon added about 5,300 workers in the quarter and has ramped up the number of warehouses it is adding to its retail network, according to Szkutak. Amazon is also investing in China where the business is growing fast. "We are very pleased with our business in China," Szkutak said. "We are in investment mode in that country," he continued. "It is a very interesting long-term opportunity." Amazon projected that sales in the current quarter would tally between $10.3 billion and $11.1 billion in results that would top the same quarter last year by 36 percent to 47 percent. Amazon's earnings bested Walls Street expectations and the company's stock price rose more than six percent to $227.80 in after-hours trading that followed release of the results.