Amazon.com announced financial results for its third quarter ended September 30, 2003. Net sales were $1.13 billion in the third quarter, compared with $851 million in third quarter 2002, an increase of 33%. Net sales benefited by $29 million from changes in foreign exchange rates compared with third quarter 2002.

Operating income was $52 million in the third quarter, or 5% of net sales, compared with an operating loss of $10 million in third quarter 2002. Consolidated segment operating income improved $46 million to $74 million, or 6% of net sales, compared with $27 million, or 3% of net sales, in third quarter 2002.

Net income was $16 million in the third quarter, or $0.04 per diluted share, compared with a net loss of $35 million, or $0.09 per share, in third quarter 2002. Pro forma net income in the third quarter grew to $48 million, or $0.11 per diluted share, compared with $0 million, or $0.00 per diluted share, in third quarter 2002.

"Thanks to free shipping and low prices, we expect more customers to turn to us for their holiday gifting needs this year-producing our biggest holiday shopping season ever," said Jeff Bezos, Amazon.com founder and CEO.

The Company currently offers Free Super Saver Shipping on orders over $25 at www.amazon.com and free shipping options at its U.K., German, French, Japanese and Canadian sites. Amazon.com is currently offering promotional discounts in apparel and sporting goods.

Quarterly Highlights

 Worldwide unit growth was 36% compared with third quarter 2002.

 Third-party seller units (new, used and refurbished items sold on the Company's Websites by businesses and individuals) grew to 22% of worldwide units in the third quarter, compared with 17% of units a year ago.

 North America segment sales, representing the Company's U.S. and Canadian sites, grew 21% to $709 million in the third quarter and segment operating income grew 137% to $63 million, or 9% of net sales compared with third quarter 2002.

 International segment sales, representing the Company's U.K., German, French and Japanese sites, grew 61% to $425 million in the third quarter and benefited by $28 million from changes in foreign exchange rates compared with third quarter 2002. International segment operating income was $11 million, or 3% of net sales.

 Inventory turns for the trailing twelve months were 19, consistent with a year ago.

 The Company expanded selection by launching a sporting goods store in the U.S. and an electronics store in Japan.