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.

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