Giant Internet retailer Amazon.com, reporting a third quarter pro forma loss
of 25 cents per share, said that it foresees continued losses in 2001,
although it may be able to contain the red ink to 5 percent of sales.
The company said 2001 sales are expected to be “approximately $4 billion.”
Before the earnings report came out, Goldman, Sachs & Co. analysts said they
Amazon reported after the bell that third-quarter earnings were
“$0.25 per share, an improvement over the pro forma net loss of $0.26 per
share in the third quarter of 1999.” The net loss was loss $240.5 million,
compared to a net loss of $197 million for the third quarter of 1999.
Analysts had expected a loss of 33 cents per share. Amazon has lost money
every quarter since it first reported in March of 1997. For the first two
quarters of this year, the company lost a total of $1.81 per share.
The company said net sales for the third quarter of 2000 were $638 million,
an increase of 79 percent over net sales of $356 million for the third
quarter of 1999. The company also said its U.S. Books, Music and DVD/Video
segment achieved a 6 percent pro forma operating margin.
Amazon reported the gross margin for the third quarter of 2000 was 26
percent, up from 20 percent for the third quarter of 1999.
Pro forma operating loss for the third quarter was $68 million, or 11 percent
of sales, compared to a pro forma operating loss of $79 million, or 22
percent of sales, in the third quarter of 1999.
For the fourth quarter of this year, Amazon said sales are expected to be
between $950 million and $1.05 billion, but pro forma operating losses are
expected to be between 5 percent and 8 percent of sales. Cash and marketable
securities at year-end 2000 are expected to be over $1 billion.
foresee “continued progress toward profitability.” They maintained their
“buy” rating on the stock, which closed at $29.56, down 43 cents, after
trading up several dollars most of the day in anticipation of the earnings
report.
GS analysts said the buy rating was “based on our belief that the company’s
progress to profitability and traction in new initiatives could drive price
appreciation.”
“The concern for investors on Amazon (which weighs on the stock) remains its
ability to extend its platform beyond books, music, and videos,” GS said.
“This was a strong quarter for Amazon.com; we are driving toward
profitability, and we surpassed our key internal operational and financial
objectives,” said Warren Jenson, Amazon.com chief financial officer. “As we
enter our sixth holiday season, we are better prepared operationally than
ever to deliver for customers, while at the same time we expect to improve
our operating margin for the fourth consecutive quarter.”
Third quarter Amazon International sales, which comprise the Amazon.co.uk,
Amazon.de, and Amazon.fr businesses, were $88 million, up 121 percent from
$40 million for the third quarter of 1999.
Seattle-based Amazon.com reportedly has lost $1.75 billion over six years.
