Amazon Kindles a fire as e-reader sales help smash Wall Street forecasts

Booming sales of e-readers in the UK and the launch of Kindle Fire in the United States have helped Amazon smash Wall Street profit hopes.

The e-commerce giant’s shares surged yesterday after it posted first-quarter profits of $130 million (£80m), even though this was lower than last year due to expansion and investment in new products.

Kindle e-readers were the best selling Amazon product of the first quarter in the UK, with six Kindle eBooks such as The Hunger Games by Suzanne Collins and Before I Go To Sleep by SJ Watson featuring on the top ten list.

The new Kindle Fire, which has been developed as an answer to Apple’s iPad and is not yet available in the UK, has taken more than half of the US market for Android tablet computers, and is able to stream films from the internet.

Chief financial officer Tom Szkutak said the device was helping to lift revenues from digital movies and books, adding: “Customers are buying a lot of content. You’re seeing that accelerate.”

During last year’s Cyber Monday, the busiest shopping day of the Christmas period, there were around 35 Kindles ordered every second in the UK, making it the best selling item in 2011.

Analysts said that sales of Kindle readers alone are not the main source of profit for the company, but that money is made from the e-books sold for the devices. Amazon’s revenues were up 34 per cent in the first three months of the year and it expects the figure for the second quarter to grow by between 20 per cent and 34 per cent.

Analysts at Citigroup, Macquarie and RBC, and at least nine other brokerages, raised their price target on the stock. Nomura upgraded it to “buy” from “neutral”.