HispanicBusiness

Based on an upbeat outlook Thursday from Amazon.com, it appears the upcoming holiday sales season could be good to at least one Internet retailer.

Shares of Amazon surged above $100 after the Seattle company reported a 68 percent increase in its third-quarter profit to $199 million.

Amazon also talked up its Kindle electronic-reading device, saying it had become its No. 1 best-selling item across all product categories, though it provided no details.

Amazon reported a 28 percent increase in third-quarter sales to $5.45 billion and projected growth between 21 and 36 percent for the current quarter.

In contrast, the National Retail Federation predicts holiday sales will slip 1 percent from last year.

Amazon appeals to price-conscious consumers who "no longer are interested in a casual drive to the mall," said Colin Gillis, who follows the company for Brigantine Advisors in New York.

"Why would I drive to a Barnes & Noble when I can get a book shipped to me for $9?" he said.

Gillis was referring to an ongoing price war among Amazon, Walmart.com and Target.com. Each recently began offering new hardcovers by the likes of Sarah Palin and Stephen King for about $9.

Thursday, the American Booksellers Association sent a letter to the U.S. Department of Justice, asking for an investigation into the cost-cutting race. The trade group fears that the price war is "devaluing the very concept of the book" and makes it impossible for smaller stores to compete.

Amazon Chief Financial Officer Tom Szkutak would not discuss the tactic in a conference call with reporters, citing the company's long-standing policy of not talking about competitors.

Szkutak chalked up Amazon's strong third-quarter showing to giving customers what they want -- low prices, free or inexpensive shipping and a vast array of products.

"We consistently have products in stock and ready for shipment," he added, noting that sales growth was spread across "categories and geographies."

Sales from the company's U.S. and Canadian Web sites rose 23 percent from a year ago, compared with a 33 percent increase for its international segment.

The worldwide media business grew 17 percent to $2.93 billion, while sales of electronics and other general merchandise increased 44 percent to $2.36 billion.

For the three months ended Sept. 30, Amazon made a profit of $199 million, or 45 cents a share, up from $118 million, or 27 cents a share, a year ago.

The company blew past the 30-cents-a-share profit analysts polled by Thomson Reuters expected.

The stock shot up more than $13.50 in after-hours trading to about $107, well above the top end of a previous 52-week range of between $34.68 and $97.82.

Earlier Thursday, it closed up 3 cents to $93.45, before Amazon released its quarterly results.

"Consumers certainly are buying from Amazon. There's no doubt about that," said Dan Geiman, a retail analyst for McAdams Wright Ragen in Seattle.

He warned against upgrading predictions for the overall retail sector based on Amazon's rosy outlook.

"It's encouraging," he said. "But the fact is, Amazon has been doing better than the retail sector as a whole throughout the downturn."

Gillis said he, too, does not see Amazon's quarterly results as a game-changer.

"I don't think people are ready to throw a ticker-tape parade and sing, 'Happy days are here again,' " Gillis said. "The last couple of years have hit consumers' psyches hard."

Looking ahead, Amazon expects fourth-quarter sales of $8.125 billion to $9.125 billion. It predicts operating income of $300 million to $425 million, or anywhere from a 10 to 56 percent above the same period last year.

Information from The Associated Press is included in this story.