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Amazon Sales Jump 21%

Online retail giant Amazon.com, reporting net sales up 21 percent for the second quarter, posted a net loss for the period of $94 million, or 25 cents per share on a GAAP basis, compared to a loss of $168 million, or 47 cents per share a year earlier.

The Seattle-based e-commerce bellwether said sales were $806 million, compared with $668 million in the second quarter of 2001.

Pro forma net loss, which excludes certain charges, was $4 million, or 1 cent per share, compared with a pro forma net loss of $58 million, or 16 cents per share, in the second quarter 2001.

The company's results surprised Wall Street as analysts on average had expected a pro forma loss per share of 6 cents on revenues of about $789 million.

Amazon CEO Jeff Bezos said the company was "especially pleased" with U.S. book sales, up 20 percent year over year. In June, Amazon extended its free shipping option to qualifying orders over $49 as a long-term test. Buy.com then nipped at Amazon's heels, offering free shipping on everything and later undercutting Amazon on book prices.

But Amazon is much bigger and it attracted 30.6 million Web surfers from home and work in June, taking the No. 1 spot within the multi-category commerce category, according to Nielsen//NetRatings

In fact it more than 25 percent of the active Internet audience visited Amazon during the month, the measurement firm said.

Bezos went on to say that "Electronics, Tools and Kitchen revenues accelerated as we lowered prices and expanded Electronics selection ... to over 60,000 items, including products from Sony, Toshiba, Yamaha and Microsoft."

Looking forward, Amazon said that for the third quarter it expects net sales of $780 million to $830 million. Pro forma operating income is expected to be between $8 million and $17 million, or between 1 percent and 2 percent of net sales.

For all of 2002, the company said it expects net sales are likely to grow by over 18 percent and a pro forma net profit is expected, although Amazon declined to say how much.

Amazon stock closed at $14.55, off 95 cents in the general market slide.

Amazon also said that by the beginning of 2003 all stock option awards granted to employees and directors will be expensed. That move comes in the wake of a series of accounting scandals (Enron, WorldCom) that have prompted widespread demands for easier-to-understand, more upfront financial reporting.

Interestingly, the company said that third-party transactions (new, used and refurbished items sold on Amazon.com product detail pages by businesses and individuals) grew sequentially to 20 percent of North American units, representing 35 percent of North American orders.

And International segment sales, from the company's UK, German, French and Japanese sites, grew 70 percent to $218 million.