From a consumer standpoint, Amazon’s Kindle has made a quite a splash, with its rapidly expanding roster of publications and new large-screen model. But will it also be a big winner financially for Amazon? According to Collins Stewart analyst Sandeep Aggarwal, yes. Here is what he is predicting in a report this morning:

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—The Kindle will earn Amazon (NSDQ: AMZN) upwards of $300 million in revenue this year and $70 million in profit, growing to $1.6 billion in revenue and at least $400 million in profit by 2012. Aggarwal argues that sales of the Kindle grow almost 80 percent a year from ‘09 to ‘12, and that subscriptions will also jump as a result. (Amazon gets 70 percent of subscription revenue). Some 30 percent of Kindle owners subscribed to a service on the e-reader last year, a number that Aggarwal will grow to 75 percent in 2012 as more products are offered and the device becomes more mainstream. 

—The launch of Kindle-DX next month will likely exceed Amazon’s expectations and lead the company to increase its financial targets for the second half of 2009.