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Amazon News Bolsters Confidence in Sector

E-commerce bellwether company Amazon.com saw its stock soar 35 percent in early trading after it made a preliminary first-quarter report showing lower-than-expected losses and net sales of more than $695 million, up 21 percent from the same period a year ago.

The news helped bolster investor sentiment for the much-maligned e-tailing sector. Amazon stock was up $2.93 to $11.30; Barnesandnoble.com was up 24 percent; while Priceline.com and drugstore.com also benefitted.

The Seattle-based company said that its pro forma operating loss is expected to be slightly less than $50 million compared to a pro forma operating loss of $99 million a year ago. Pro forma net loss is expected to be 22 cents per share or less, the company said, an improvement over the pro forma net loss of 35 cents per share in the year-ago quarter.

Analysts had been projecting a pro forma loss in the vicinity of 30 cents per share.

Amazon.com said that its sales increases in the first quarter of 2001 were fueled by boosts in spending in the electronics and international categories.

The company's stock had been off as much as 46 percent since the first of the year. Its 52-week high is $68.20. Amazon in January said it would fire 1,300 people, or 15 percent of its workforce, to reduce expenses.

Net loss for the first quarter is expected to be less than $255 million, down from a net loss of $308 million a year ago, the company said. Excluding this quarter's portion of the previously announced restructuring charges, the net loss is expected to be less than $150 million.

Amazon said its gross profit for the first quarter is expected to exceed $175 million, an increase of over 35 percent compared to gross profit of $128 million. U.S. books, music and video gross profit is expected to increase more than 30 percent on very slight sales growth.

The company is expected to makes its formal first-quarter earnings report on April 24.