April 24 (Bloomberg) -- Amazon.com Inc., the world's biggest online retailer, said profit doubled, exceeding analysts' estimates, on increased sales of electronics and clothes and a lower tax rate.

The shares surged 12 percent as the company raised its profit and sales forecast for the year. First-quarter net income climbed to $111 million, or 26 cents a share, from $51 million, or 12 cents, a year earlier, Seattle-based Amazon said today in a statement.

Consumers, drawn to Amazon's Web site by shipping discounts, bought digital cameras and video games as it competed against Wal-Mart Stores Inc. and Best Buy Co. Sales of DVD players and general merchandise including apparel, watches and shoes, rose 48 percent, almost double the pace of media products.

``Amazon has a lot of customer loyalty and gets people to explore products beyond music, books and videos,'' said Colin Sebastian, a San Francisco-based analyst with Lazard Capital Markets LLC, who has a ``hold'' rating on the stock.

Sales climbed 32 percent to $3.02 billion.

Shares of Amazon surged $4.46 to $50.21 at 6:55 p.m. after the results were released. Earlier, they fell 2 cents to $44.75 in Nasdaq Stock Market composite trading at 4 p.m. The stock has advanced 25 percent in the past 12 months.

Amazon boosted its 2007 operating income forecast to as much as $593 million from as much as $505 million. The company also boosted its 2007 sales projection to as much as $14 billion from as much as $13.7 billion.

Analysts surveyed by Bloomberg had estimated operating profit of $508 million on sales of $13.4 billion.

Tax Rate

Profit was helped by a tax rate of 23 percent, compared with 47 percent a year earlier. The tax rate was cut in half after certain assets were moved to Europe from the U.S. and led to a gain of 4 cents a share, Chief Financial Officer Thomas Szkutak said.

Thirteen analysts surveyed by Bloomberg had estimated net income of 16 cents a share on average with sales of $2.93 billion.

Media sales, which includes books and music and makes up about two-thirds of revenue, rose 26 percent. Sales in ``soft goods,'' including apparel, watches and shoes, doubled, Szkutak said. The company does not breakout specific product sales figures.

The retailer sells products in about three dozen different categories, including jewelry and gourmet food. More than 143 million people visited Amazon's Web sites in February, making it the world's seventh most popular, according to Reston, Virginia-based ComScore Networks.

`Go-to Site'

Amazon's strategy ``is to be the go-to site for all retail,'' said Tim Ghriskey, who manages about $1 billion as chief investment officer at Solaris Asset Management LLC in Bedford Hills, New York, and a former shareholder. ``They've really built a user-friendly Web site.''

Second-quarter revenue will be between $2.70 billion and $2.85 billion, Amazon said, more than the average analyst estimate of $2.69 billion. Operating income will be as much as $105 million, the company said.

Amazon's technology and content costs fell to 6.2 percent of sales from 6.4 percent a year earlier.

``We were able to leverage our costs with the high growth rate we had,'' Szkutak said in a conference call today with the media.

Szkutak said last month that the company would slow technology spending this year after Amazon's profit margin fell to the lowest level since 1999.

The company also said may repurchase as much as $500 million in stock.

Book Margins

Amazon has sought to overcome shrinking margins of book sales, which have fallen as Barnes & Noble Inc. and other bookstores have cut prices and promoted customer loyalty programs.

The company sells electronics such as Samsung flat-screen televisions and Canon digital cameras for less than competitors such as Best Buy and Circuit City Stores Inc., according to their Web sites.

Amazon last year introduced its ``Unbox'' service, which lets customers download TV shows and movies. The service competes with similar offerings from Apple Inc., Blockbuster Inc. and Netflix Inc.

Video Downloads

Unbox does not appear to gaining a foothold, said Aaron Kessler, an analyst with Piper Jaffray, in a research note yesterday.

Other initiatives may take years to come to fruition, including Web services, which allows other online retailers build Internet sites, track sales and add products, wrote Kessler, who has an ``underperform'' rating on its shares.

The company did not release specific results for Web services, though Chief Executive Officer Jeff Bezos said he was ``very pleased'' with results so far.

Broadening the selection of Unbox titles ``is certainly something that's a core brand attribute for Amazon,'' Bezos said on a conference call. He declined to say whether Amazon would offer monthly subscription services for Unbox.

To contact the reporter on this story: Danny King in Los Angeles at dking19@bloomberg.net

Last Updated: April 24, 2007 19:02 EDT