Amazon's profits' flow disappoints

Amazon highlighted the impact of investment in new warehousing and marketing to support its Kindle electronic reader.

It indicated that operating income could fall as much as 24 per cent to 360 million US dollars (228.5m) or rise 18 per cent to 560 million dollars (355.4m) in the fourth quarter, which means expenses are likely to rise.

The Seattle-based company reported a 7 per cent improvement in operating income in the July to September quarter to 268 million US dollars (170m).

Larry Witt, an analyst at investment research firm Morningstar, said the level of expenses for both quarters had put a dampener on shares.

He added: "They're still growing fast, but people are probably getting anxious to see operating leverage."

Amazon reported a 39 per cent rise in third quarter revenues to 7.56 billion US dollars (4.8bn), with sales from its largest category of electronics and general merchandise ahead 68 per cent to almost 4 billion US dollars (2.5bn).

Revenues from books, CDs and DVDs lifted 14 per cent to 3.35 billion US dollars (2.1bn). The best selling book in the UK was The Girl Who Kicked the Hornets' Nest by Stieg Larsson, Amazon said.