Posted by: Rob Hof on October 23, 2007
Easy come, easy go: First, investors figured Amazon.com was going to beat third-quarter earnings estimates, so shares jumped 10% by the close of trading today. Then Amazon reported that profits quadrupled, on a 41% jump in sales, to $3.26 billion. Not good enough, apparently, and the stock was falling 10% in after-hours trading. That’s not so surprising, with Amazon’s forward price-to-earnings ratio at a nosebleed level of 59 and the shares doubled since April. What really matters is that Amazon’s bet on free shipping still seems to be working as it heads into the holiday home stretch.