Amazon.com’s third-quarter 2005 profit plummeted 44% to $30 million from $54 million in the third quarter of 2004 mainly as the result of a $40 million settlement of a patent lawsuit, the world’s largest online retailer reported.
If not for the settlement, the company’s third-quarter profit would have $50 million, Amazon.com said.
In August, Amazon.com paid Soverain Software $40 million to settle a patent lawsuit over its shopping cart software just days before the two were scheduled to go to trial.
The settlement also hit the company’s operating income, which dropped 32% to $55 million in the third quarter of 2005, compared to $81 million in the third quarter of 2004.
The slump came as sales were up a hefty 27% to $1.86 billion last quarter, compared to $1.46 billion in the third quarter of 2004.
Amazon.com’s North American sales were $1.04 billion, the company said.
Amazon.com said it expects fourth-quarter sales to between $2.86 billion and $3.16 billion, or grow between 13% and 24%, compared to the fourth quarter of 2004.
Amazon.com also offered some non-financial tidbits. For example, the company said that its customers used its 1-click technology to contribute more than $12 million to Hurricane Katrina relief efforts. Also, Amazon.com reported that it sold more than 1.6 million copies of “Harry Potter and the Half-Blood Prince,” making the book Amazon.com’s largest ever new-product release.
