Lower margins blamed on litigation settlement and investment
Amazon.com, the world's second most popular online retailer, has seen profits slump to US$19 million (£10.1 million) from US$30 million (£16 million), despite sales rising a quarter in the three months to September 30.

The book and entertainment e-tailer said that margins had fallen due to increased investment in technology and having to make a patent litigation settlement.

Overall revenue for the three-month period rose to US$2.31 billion (£1.23 billion) compared with US$1.86 billion (£990.7 million) last year and the company added that it expected a record Christmas.

Amazon - which is second only to eBay in global online sales - said that full-year operating income would be between US$339 million (£180.6 million) and US$429 million (£228.5 million).

Analysts told The Daily Telegraph that the performance, although showing shrinking profits, was above expectations.

Sales through Amazon's international division - which includes its UK web site - grew 29 per cent to $1.05 billion (£559.1 million) from the same period last year.