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Amazon Q1 Back in Red, Raises Outlook

Amazon slipped back into the red during the first quarter of 2003, but the online retailing giant raised its outlook for the year after its sales grew by 28 percent for the second straight quarter.

The world's largest online retailer said its net loss for the quarter was $10 million, or 3 cents per share on net sales of $1.08 billion.

Amazon's revenues were up by 28 percent over the $847 million it grossed in the same, year-ago period, its second straight quarter its sales jumped by 28 percent. The rise was fueled by cut-rate pricing and free shipping offers on orders of $26 or higher. On the strength of domestic and overseas sales, the Seattle-based company said it would raise both its second quarter and full-year outlooks.

Second quarter net sales are now expected to come in between $1 billion and $1.05 billion, up by between 24 percent and 30 percent.

For the full year, Amazon is now expecting its sales to jump by 19 percent to $4.7 billion, over the prior expectation of 15 percent growth.

Its operating income is expected to grow by 50 percent to $275 million for the full year, the company said Thursday.

"Our strategy of driving down costs to give customers lower prices continues to pay off," said Tom Szkutak, chief financial officer of Amazon.com.

"In the first quarter, customers took advantage of free super saver shipping and broad everyday low prices, which created our first-ever non-holiday quarter with sales over $1 billion, but this was only possible because we reduced our costs in virtually every area of our business."

Although the company's net loss this quarter was less than half of its loss of $23 million (6 cents per share) in the first quarter 2002, the results also represented a slide back to the red for Amazon.

In the fourth quarter, Amazon eked out a $3 million profit, or 1 cent per share, its second quarter of profitability after it declared a profit of $5 million in the fourth quarter 2001, or 1 penny per share.

Late last year, Amazon said its free Super Saver shipping offer on orders over $26 would continue for the year.