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5 Key Quotes from Amazon on the E-Commerce Industry

In the earnings press release from Amazon.com today, Amazon included a $53 million one-time non-cash gain as "operating earnings" for their reported FY08 Q3, thus increasing their reported earnings per share for the reported quarter. Although I am not an accountant, this does not seem legitimate.

Making this seem even more suspect (to me), is the fact that when asked by analyst Scott Devitt of Stifel Nicolaus during the subsequent conference call, Amazon stated that they are excluding said $53 million one-time non-cash charge in their full-year "operating-earnings" guidance. Is this acceptable?

Can they use a one-time non-cash gain as operating earnings one place, but not another?

Can they use a one-time non-cash gain as operating earnings--at all ??

Sounds like Amazon, in effect, pulled a rabbit out of a hat to "make" their quarter, and please the Wall Street community. I can't imaging this is an acceptable, forthright nor an honest accounting practice. It may be even sneaky.

"Operator"

Your next question comes from the line of Scott Devitt – Stifel Nicolaus

Scott Devitt – Stifel Nicolaus

As it relates to the guidance and the change for the guidance last quarter you gave full year GAAP operating income guidance $740 to $940 and the GAAP operating income this quarter was I believe $57 million above expectations including the $53 million gain so I’m trying to get my hands around the updated guidance which is mostly unchanged from the prior GAAP operating income guidance and whether this new guidance includes or excludes the $53 million gain.

Thomas Szkutak

Yes, the GAAP, the guidance excludes the $53 million gain."